Skip to main content
8:30 am
and so popular that she sets trends in clothing and children and ships are named after her. meet harriet lane. we'll look at that of her life and her predecessor, jane pearce. first ladies, tonight live at 9 eastern on c-span and c-span3. also on c-span radio and >> documentary film maker ken burns recently spoke at the national press club about his latest project called "the central park five." it tells the story of five be african-american and latino teenagers who were wrongly convicted of raping a female jogger in new york city's central park in 1989. the documentary premieres tomorrow on pbs. this runs about an hour. [inaudible conversations] >> good afternoon and welcome to the national press club. my name is angela, i'm a
8:31 am
reporter for bloomberg news and the 106th president of the national press club. we are the world's leading professional organization for journalists committed to our profession's future through programming we sveltes such as this while fostering a free press worldwide. for more information please visit your web site at to donate to programs offered to the public through our national press club journalism institute, please visit on behalf of our members worldwide, i'd like to welcome our speaker today and those attending today's event. our head table includes guests of our speaker as well as working journalists who are club members. if you hear applause from our audience, i'd note that members of the general public are also attending, so it's not necessarily evidence of a hack of journalistic objectivity. [laughter] i'd also like to welcome our c-span and public radio audiences. our luncheons are featured on our member-produced weekly
8:32 am
podcast from the national press club available on itunes, and you can follow the action today on twitter using the hash tag npc lunch. after our guest's speech concludes, we will have a question and answer period. i will ask as many questions as time permits. now it's time to introduce our head table guests. i'd ask each of you to stand briefly as your name is announced. from your right, glenn marcus, documentary writer and producer with public communications incorporated. kennon smith with nbc washington. robert mcpherson, lifestyle editor. jennifer lawson, senior vice president for television at the corporation for public broadcasting. megan pointsky, knight regional point editor for "the washington post". sharon rockefeller, president and ceo of weta, the local pbs affiliate. skipping over the podium, allison fitzgerald, project
8:33 am
manager for financial and state news for the center for public integrity and the speaker's committee chair. skipping over our speaker for a moment, natalie, a reporter for "usa today." paula krueger, president and ceo of pbs. julie -- [inaudible] national reporter for bloomberg news. akio fuji, washington wiewr your chief and molly mccloskey, vice chair of the national press club's freelance committee. [applause] in 1989 five harlem teenagers were wrongly convicted of raping a white woman in new york city's central park. that sexual assault of a white jogger sparked a media frenzy and public demand for justice that led to the conviction of these so-called central park five. despite dna evidence that excluded them and no eyewitness
8:34 am
accounts tying them to crime. a serial rapist later admitted to being the perpetrator, but not before these young men served complete sentences of between 6-13 years. in his latest documentary, our guest today, ken burns, tells the story through the vivid testimony of the central park five in what is an unflinching and painful documentary. the movie was produced by ken burns along with his daughter, sarah. zaire what was only 6 when the events took place, and when she learned about it after the teens' convictions were overturned more than a decade later, she was so taken with the story that she wrote her undergraduate thesis and then the book on the topic. the film based on her book documents how the forces of the justice system, the press and popular prejudice conspired to undermine the rights of five young men and condemn them to years in prison for a crime they
8:35 am
did not commit. last night when we screamed the film here at -- screened the film here, we were honored to have with us two of the central park five who have been traveling with the film makers armed the country to major film festivals. in addition to drawing praise from film critics and audiences, the documentary itself has also been making news. a federal judge in february ruled that new york city may not look at outtakes, notes or other material from the film in their efforts to fight a $250 million lawsuit brought by the central park five against the city. we will discuss this and other developments in our conversation with mr. burns whom we are delighted to welcome back to the press club for his eighth appearance at a lincoln. he has been -- at a luncheon. he has been called one of the, quote, most influential documentary film makers of all time. ken burns' films have won 12 emmy awards and received two
8:36 am
oscar nominations. among them have been highly-acclaimed documentaries about jazz, baseball, the brooklyn bridge, u.s. national parks and, of course, the civil war which was the highest rated series in the history of american public television. please join me now in welcoming back to the national press club to discuss his latest film, mr. ken burns. [applause] >> thank you so much. it's good to be back here. i'm thrilled to be back here. um, let me not bury the lead. on april 16th, that's this coming tuesday, pbs will broadcast our two-how were film, "the central park five." this film would not have been made without the help of an extraordinary number of people, some of whom are in this room. and it is important for me before i begin to acknowledge them. first, i'd like to thank weta,
8:37 am
my production partners for the last 30 years, and particularly its ceo, sharon rockefeller, who is up here. they have been the best production partners anyone could imagine. we have been through thick and thin on a number of projects, and we have counted on them having our back, and they've had our back through the many decades that this association, um, has gone on. and i have been blessed to have that, that association. i happen to be one member of an extremely important family, and that is public broadcasting. there is no other place on the dial where you can get the kind of quality work that that happens only on public television without commercials, which is sometimes taken for granted. but incredibly important in our distracted universe. we can actually dive deep into subjects in ways no one else can do, and we do it serving the
8:38 am
public. it is the public broadcasting service that we are about, and i am honored to be a small part of it can and a little niche doing history in an extraordinary network that spans the entire united states with more affiliates than any other network and touches deeply into the lives of people not just with its extraordinary prime time schedule, but with continuing education and adult learning and early child hollywood things, even homeland security, crop reports, all sorts of things that help stitch our country together. it is by no means some elitist, coastal institution, but something that is beloved in red state and blue across this extraordinary continent of ours. and so i'm very pleased to have spent my entire professional life producing films for public broadcasting. it is the only place to be, and i'm very honored that paula krueger, the chief executive
8:39 am
officer and president of pbs, is here with me and a dear friend as well as sharon is. we don't make these films without funding, and as you can imagine, a film like this has some very dicey aspects to it. not everybody who is interested in the traditional historical work that we've undertaken over those last 35 years have been, um, as excited about the possibilities of this as have the people who actually did fund it. and i have to acknowledge their support from the very beginning. without them this literally could not, would not have been made, and that is also pbs, but also our longtime support beer -- sporter. more of our films have been supported by the corporation for public broadcasten they any -- broadcaster than any other
8:40 am
entity. ably represented by jennifer lawson, also a friend of many years, has been extraordinary in helping us fulfill our desires to make the variety of films we've had the opportunity to make. they were in from the beginning, but when we surveyed the landscape of other possible funders, most shrank away from this very difficult subject, this recent history, if you will. two groups stood out. one was the better angel soapt which is a nonprofit -- society which is a nonprofit group started to help us fund our historical exercises, and bobby and polly stein of jacksonville, florida, stepped forward and made a significant grant. but no grant was more important, more central than the huge grant that came from the atlantic philanthropies which made the largest grant of this particular production and, indeed, the largest grant aye ever receive -- i've ever received percentage wise for any film,
8:41 am
upwards of 75% of our entire budget. it was an amazing risk and commitment, and we can't imagine having lived through the last several years which have been quite arduous producing the film without them. and i'm sorry, i don't think there's anyone from atlantic philanthropies here, but if they are, you know, we thank you from the bottom of our hearts. there are some missing people here, and angela alluded to them. the first is my daughter sarah who has been on the road for way too long and is rushing back to talk care of my granddaughter, her daughter and is the author of all of this. not just of the superb book that she published in 2011 that her husband, david mcman and i had the opportunity to see as the first pages were coming out of her commuter and realize what -- computer and realize what an extraordinary film this could also be in addition to a book, but she has been the author in the sense that for more than a
8:42 am
decade she has felt and carried and agonized over this story. she has been by turns obsessed but also outraged by it. and that outrage has fueled a great deal of her creative energy. it has fueled my own interest, her husband david mcmahon's interests, and i don't think we would in any way possibly be here without her superb guidance. she is an incredibly intelligent woman, incredibly articulate. she has also, i can assure you as her proud papa, had a fierce sense of fairness all her life. and there was something about this story that so fended her sense of fairness not just in the classic sense that we feel as americans that there should be a level playing field, not just in the sense that things should just be fair and people shouldn't sulk and take their ball home, but in a kind of deep human sense of fairness. because this story as much as it
8:43 am
enjoins and gathers together themes of importance, historical moment, it nonetheless also reflects on just basic human things of failure, of mistakes, of atonement, of forgiveness, of reconciliation, of compassion. and all of those are in great abundance sarah, -- with sarah, and she kept us in the right direction. the rest of that is david mcmahon. he is my son-in-law, her husband, but he is the creative center of this film. he managed it day-to-day not just as a field general and as a producer, but as the person most responsible for the creative look and feel of this film. no him, no film. and he has worked tirelessly behind the scenes for way too long and deserves the lion's share of the credit. that comes to this film. and so i feel as i speak to you
8:44 am
this afternoon the absence like amputated limbs that tickle and itch long after they're gone. my daughter and my son-in-law deserve to be here, deserve to share this podium, deserve to receive whatever credit you might extend to the film. and if there's anything you don't like, it's all my fault. [laughter] also missing are five extraordinary individuals; antron mcclay, kevin richardson, yusef saw lomb, raymond santana and core ri wise. they are the central park five. if you were a member of the central park five in 1989, you were among the worst human beings on earth. today that is quite different, and to be counted among the central park be five is to be counted among a band of brothers
8:45 am
who i think represent in some ways the best of us, that represent a kind of heroic forbearance in the face of unbelievable odds, who exhibit a startling lack of bitterness and anger, who have grown in the course of this immense and infuriating tragedy into extraordinary young men who have graced our lives and become friends of our family and have been out on the road with us with a style and a degree of articulation that i think those who were here last night when we had the opportunity to screen the film understand. ..
8:46 am
first is an obvious one and it ought to be on the list of all journalists. in fact, part of this disturbing story is the utter failure of our profession to rise to the occasion in this particular instance. and that is, how could something like this have happened in america at the and of the 20th and the beginning of the 20th century. how could this injustice have taken place? and second, because their voices were stolen from them, ripped apart by police and prosecutors and then and at the compliant media interested in whatever, you know, if it bled it lead. they lost their voice. we wanted to ask another question. who are they? who are they? could we in some ways not
8:47 am
restore or make them whole, that will have to come from other places, but it would at least listen to them and find out who we are? we are in the country. we live in a country that is so dialectically preoccupied. we are certain that if we make the distinction about the other, that your red state or blue state, that you are black or you are white, you are male or your female. you are rich or your poor. you are gay or you're straight. you live here or you lived there. that somehow, off, we will have the whole of you. and, unfortunately, particularly when it comes to race and class, we do a lousy job, and would exploit and forget that each human life within the sound of my voice is as important and as full as any other life in this room. and, unfortunately, that was stolen from "the central park
8:48 am
five." and so missing also and must be foremost in our thoughts are not only the authors of this, sarah indeed, but also the five of them who are in every sense of the world real and complete human beings, who have undergone trials none of us in this room could possibly even imagine, and have come out as good, if not better, than anyone in this room. they are, i it. i made a distinction. let me tell you what happened. on april 19, it was a wednesday night, 1989, in new york's central park. a woman, a white woman jogger, an investment banker at salomon brothers was brutally assaulted and raped and left for dead in the northern reaches of central park. earlier that evening, a group of
8:49 am
perhaps 25, perhaps 30, perhaps more, young boys, teenagers, african-american and hispanic, entered the park. it was a wednesday night, a school night, but school was off the next day. there was a passover holiday and their parents had given them permission to stay out late. some had stayed behind and played basketball games at the projects, others had gone into the park with a group of people. most didn't know each other. they were going around doing something that was recorded called it just hanging out, or just while away the hours. or in the vernacular, while in. just spending time doing nothing. they proceeded to go through the park. several of them began to sort of harassment joggers and bicyclists, threw stones, tried to interrupt their course. they kept moving farther and farther south into the park. they rolled a drunk. not all of them.
8:50 am
this is a couple of people. it was watched by some of them. and then there was a serious assault me, a felony assault on a man who was eaten enough to require temporary -- beaten enough to require temporary hospitalization to all of this was taken over the course some time that early evening in the park. the police were notified as joggers and bicyclists came across them in the park, and they came and sort of flash their sirens and broke up this crowd, and they scattered and reconvened, some of them. many of them went home at that moment. but some began to be picked up by the police, including two of "the central park five" who have become "the central park five," kevin richardson and raymond santana. and they were held along with a lot of other boys for unlawful assembly, and we're going to be sent home when their parents
8:51 am
arrived with the citation for family court. and that was the. and everybody was beginning to feel relaxed, when late that night the woman's body was found, near death in the northern regions of central park. she was so close to death that he was assigned to homicide, and they were certain she was going to die. and immediately decided that perhaps, not on recently so, that these youths they had collected, and the other two names that are also collecting wood been out in the park, were responsible for this crime. and then there began his descent into a hell that dante could not imagine, for these young men. some of them had been in the system before. some of them had committed crimes, new how to lawyer up, got out right away. but the people who would eventually be called "the central park five" came from good, stable, middle-class
8:52 am
families. they had never been in trouble before. they had no idea what was going on and submit the questions shifted from we're going to let you go to your parents for this seemingly minor set of events, to suddenly you are responsible for the brutal rape of this person. what take take place over the n0 hours is one of the most horrific things that i believe has ever taken place in the american criminal justice system. these boys, children, two of them were 14, two of them were 15, and one of them was a developmentally challenged 16 year old who admits in our film that he felt and probably accurately that he was 12 years old that night. the police began working on them. in one case, up to 30 hours with a young boy without the benefit of a lawyer, often without their parents present, without food or water. telling over and over again what they had done.
8:53 am
that they had their fingerprints. at one point yusef salaam said was that he felt they were so angry, they were screaming at him, spitting at them, blowing smoke in his face. so angry that they thought that they're going to take them out and kill them. they were petrified. their parents had also experienced this sort of crimes of being black or brown and a large metropolitan city, as they had grown up. many were immigrants or recent arrivals in the city. and they were petrified, too. did not know enough about the rights of miranda to stop the proceedings at any time, which would've ended up and i would not be here if that had happen. i would not be here today if a parent had stepped in or a child had convoked his veranda rights to a lawyer. those that did come as i said, got off with smaller centers, plenty within actually done. but these five strangely enough the most innocent and unacceptably the most vulnerable within our criminal justice system would do this extraordinary experience of
8:54 am
being interrogated. it was kind of a circular firing squad. the copts would say we know we have your dna on this. we have your fingerprints on her pants. we know you didn't do it but a guy in the next room, kevin come room, kevin gummi seigneur doing it and reminiscing who was given? i've never met him before. we think raymond, you're a good kid and you didn't do it. but he is saying you did and if you just will say that you saw him do what we will let you go. parents would come in and just look after hours and hours until the sun just tell them what they want. they will let you go to each one of them, two boys said to us as men later on, all i wanted to do was go home and they would be dangled out, being able to go home. if they would only say this. so after several hours, third in the case of one of them, 16, 20. they suddenly had arrived at a
8:55 am
place where the copts felt they've gotten the story right. what was clear i is they didn't know anything about the crime. they were nowhere near. no, no, no. , up near the law. they did not know what was going on. they were petrified. they began to piece together confessions. at this point, the district assistant district attorney, elizabeth, turned on a video machine, and with the burly detectives have done this good cop, bad cop interrogation standing with arms folded behind them begin to record their confessions in quotes, coerced confessions. within each of these confessions are glaring contradictions. between these confessions there are acquiring contradictions. none of which attracted the attention of the seasoned professionals, new york's finest, as they are called, who
8:56 am
are responsible finding the criminals in our society and who, in this case, failed to entertain an alternative narrative that may have saved the lives of these five boys. but also action with allies of other human beings. because they were so focused and so excited that the crime of the century as mayor ed koch called it had been solved by them within the first few hours, they're kind of to the celebrator watering hole of the lane and given themselves high fives and raised a toast to each other, that this crime of the century had been closed. what they didn't disclose to themselves was that two days before april 17, 1989, a woman was assaulted, and that assault was broken up by a man who she described as having fresh stitches on his chen. a detective, young detective was assigned to track down through local hospitals who this person might've been. by the end of the day they had his name. his name was mike tellez reyes.
8:57 am
nobody follow through. -- matias reyes. matias reyes committed the crime the next day, april 19 on the central park jogger. went on while the cops and prosecutors were focused on this horrible miscarriage of pinning it on the five. went on to rape and assault many of the women that spring and summer, including murdering a pregnant woman and her unborn fetus. he was eventually caught not by the police but by civilians who held him down and killed the place to come. many of the police who worked that case had been police who had worked over "the central park five." what happened as the district attorney's office was gathering their evidence is that they found at the crime scene a horrific bloody crime scene, which by the way, not a bit of this horrific bloody crime scene
8:58 am
was on any of the five boys, and none of them on the crime scene. they had extracted a single piece of dna, a cement sample that represented the only forensic evidence that linked another human being to the crime scene besides the poor victim lying near death at metropolitan hospital in east harlem. they then proceeded to try to match samples with the five. they did not match. they did not at that time began to entertain an alternative narrative, knowing of the contradiction, knowing the fact that as they still claim they acted in good faith during the 30 hours of interrogation of a 14 year-old saying that we didn't suspect them, we just asked them what happened. it took apparently 30 hours to get the stories of straight out of their mouths and onto a videotaped confession. yusef salaam's mother worked at parsons college and she burst
8:59 am
into the interrogation and refuse to have it go on. so he did not make a videotaped statement. but the other four did, they're all in the film and they are terrifying in their extreme. one would expect this sort of moment and some other place in the united states of america. meanwhile, all hell is breaking loose in the united states of america. this is the crime of the century. this it does appeal to our worst and bassist is of the other. those distinctions that we always me, particularly of people based on color. these were both back, before the wild or is that while being became wilder's. a phrase made up by the police to say what these remorseless on the always emphasize how remorseless these five were. the press took it over. there was not healthy skepticism that we expect from the press which had a generation before any early '60s taken a coerced
9:00 am
confession of an african-american named george whitmore that just coincidentally died a few months ago and his obituaries to in "the new york times," the press said, wait a second. and investigated all these claims of allies, founder they were true. he was exonerated before lengthy period of time and that led to miranda. this, because of the firestorm of outrage at this moment lead to the death penalty being reinstated in new york state. donald trump took out full-page ads in every one of the daily papers saying, bring back the death penalty. reputable, so-called reputable columnists like patrick began said that the oldest of them, this is by the way development only challenged corey wise, out to be taken and hung in singapore. the other four flawed as an example so we could make the park which is and always has been i wrote to the safe place,
9:01 am
safe again. liberal columnist as well joined the drumbeat of this. everyone accepted the verdict that they were guilty. we rank our hands and said what's happened to our society? what's happened to our family structures? governor cuomo basically backed off and said, nobody is safe, even walked into doors you're not safe. it was almost as if he was abandoning the city. ed koch mocked on the street the idea one had to say alleged perpetrator. he said that when the grandmothers or their mother say, but they're good boys, don't you believe them. the mayor of new york said. and nobody believed them. they had left over when suddenly they realize what they've done. immediately recanted the confession, said it wasn't true, and went on to try to assemble a defense. one had a public defender to get an extraordinarily credible job. arrest were ill served by council. by the time this went to trial, they were guilty, guilty, guilty throughout the world, and the trial was an affirmation of the. but even then with no dna match,
9:02 am
with the inconsistencies within the confessions, ma one lone juror in the first row that divided into two trials, three and one, two in the other. he held out for 10 days until, you know what, he got so much problems from the other jury members don't you know he did? he decided he wanted to go home. just as the boys had done. they went to jail for upwards of 13 years, between seven and 13 years. these were men, children, boys, who were offered a chance at a plea deal and didn't take it. as yusuf said, if i was guilty of something i would've tried to get the least sense, but you could put in jail for the rest of my life. i didn't know what that meant that you could put me in jail for the rest of my life. i was not going to cop to sunday i didn't do that every time they were up for parole after these horrible institutions, kharey going to maximum-security prisons, and the other four, for
9:03 am
a list of figures going to juvenile facilities but are not much better, in which sex crime offenders are at, are vulnerable in ways no other prisoners are vulnerable. they all at parole hearings refuse to admit their guilt, which would've speeded up their exit from jail. they all attempted to get, and several did get, degrees before those programs were taken out of equivalent c. degrees before they're taken out of the prisons. it was an extraordinary display of sort of willful advancement in the face of all of this. as kharey said so poignantly in the film, he said all the scuffling, the jumping is on, the stabbings, the trials and regulations -- tribulations, that speaks audience to we know what's governments are. we can only wonder what
9:04 am
jumping's on me. we know what stabbings me. we know what trials and tribulations are. they went through. finally, they were released from jail, except for corrie who was serving an adult sentence of 13 years. the ones that were out how to register as sex offenders, couldn't get jobs. raymond himself was so upset he ended up with the drugs, and because he was not a first time offender but a predicate felon, he went back to jail for drugs. and, finally, just before the kharey wise was being released from jail at auburn correctional facility, he bumped into matias reyes toy been caught that same summer. they actually spent some time and gotten into an altercation at riker's island over the use of a tv way back in 1989, but now it's 2002, and matias reyes apologized to kharey and kharey said hey, we are in here. and after kharey left, he went
9:05 am
to the warden, matias reyes, the rapist, and said, that guy did time for a crime i committed. committed. and suddenly his 13 year-old dormant case comes blowing wide open. the da comes up. they take a sample. it matches the unknown semen sample from before. raise start giving details of the case that no one knew. even cops did no details on this that suddenly a piece it all together. the district attorney, robert morgenthau, who would oversee the original to prosecutors have been involved in the case, elizabeth and linda, assigned new ada's, and they reinvestigated. and as morgenthau told many of us and reporters at the time, if i knew then what i knew now, i would not have even indicted these five. they went, they being both the prosecutors and the defense, together in unison, went to a
9:06 am
judge and asked together in unison that the judge vacated their convictions, which he did in a nanosecond. and instantly because he was no longer a predicate felon, raymond was released for time served and they were all out. the story got almost no play. the reactionary "new york post" played it from the cops and the prosecutor pointed and said, this was a big mistake. they have done it, they were involved. they became a house organ for the police and prosecutors over the next years. and because it represents such a gross failure on the part of all of you, those of us involved in the media, everyone else remained relatively silent, and it permitted those reactionary forces to define the narrative for the next 10 years. because when these convictions were vacated in december 2002, the following year, 2003, the five launched a civil suit
9:07 am
against the city of new york. the city of new york has nearly a billion dollars to pay for such suits. they are settled out of course more often than not. when they do go to trial, these happen within a reasonable period of time. we are now in the 10th year of lack of settlement. full deposition, full discovery as it is close has not taken place yet after 10 years. the five and their families have been requested mountains of material, which they can't possibly assemble and produce. meanwhile, detectives can't find her nose, they are legally required to save. first, the language in the press is the language of jim crow america, not a northern progressive city at the end of the 20th century. the tactics of the city have been i believe reprehensible in the extreme. even last fall they spend all of our outtakes and notes, seeking
9:08 am
in a cynical phishing attempts of look for inconsistencies. you entered a parking utility under the park at 9:01. you told can answer and did you entered at nine due to time that. do you always live? one assumes. we at least for the time being have fought back and a federal magistrate agreed and severely rebuked the city in his decision that we did a journalistic, the city said we are a one-sided advocacy piece. now, setting aside the fact that this is the most journalistic of all the films we have done, even if it was an advocacy piece, so what? have they heard of the first amendment? was this country not born on the idea we could express an opinion? does every editorial board of every newspaper in the country have to fear the intrusion of the government if they decide that they want the help of that newspaper, help them solve a
9:09 am
crime? we are not obligated to do that, and the judge found that an reversed some of the pernicious decisions that have taken place before that were more onerous for filmmakers and journalists. and we're happy with the city immediately repealed and we are once again, like "the central park five," drawn into this terrible story. i don't mean ending there to suggest that we are the story. we are not. the most important thing has to be on the five and what they have gone through. they've had their lives blaste. i don't know if any of you sitting here remembers where you work when you're 14 or 15, 16. your life is unfolding, who you will take, you will go to the prom, when you get to your car or drive a car. what kind of jobs you will get. who you will become. all of that was robbed from them. they will never get it back. i have no interest myself, nor do sarah or they have an interest in what the settlement is that the city might give them, or what the results of the
9:10 am
trial, if, in fact, insist that it goes to trial, might be. we are only interested that there be a settlement. that there be a period at the end of a long run-on sentence of injustice that is intolerable in the modern society that has proclaimed since its birth that all people are created equal. the founder of 200 human beings and never saw the contradiction. contradiction. that we say and a pledge of allegiance liberty and justice for all, and it appears more and more like its liberty and justice for those who can afford it and have lighter complexion than the rest of us. and so we leave this case hanging, as our film is left hanging, wondering what will we all do? what is our responsibility as journalists? but also as citizens, to try to do with what took place. and ladies and gentlemen, in conclusion, i am very sorry to say that this rid of snorting narrative, this incredibly gripping story that we've tried to tell, this descent into hell
9:11 am
is not a unique story in american history. it happened yesterday and it will probably happen today and it will happen tomorrow. and at some part in the stories that we tell each other, in the way we report the ongoing facts of our lives, the way we superimpose a kind of frame around the random chaos events and call it art or column of these are called journalism, when do we start and say enough? when do we actually rise up and live out the true meaning of our creator, as dr. king said, and judge people not by the color of their skin but as you'll see in our film, when you meet antron and kevin and yousef and raymond and kharey, the content of their character. thank you. [applause]
9:12 am
>> to what do you at the failure of the press and media to investigate the report accurately? and what lessons should the press take away for future cases like this? >> we are in a funny era in which we have to be both a conscious of the country and also businesses that make money. and we can read polls and demographics and ratings, and we know that if it bleeds, it leads. this was so fantastic a story, so impossible a story, so perfect a story that the healthy skepticism that is normally present and is sometimes still to this day present disappeared.
9:13 am
that's what we can do differently. that's the message. we just have to do our job. it wasn't done here. >> this is perhaps i think you just said it yourself, your most journalistic of the many films you have produced. do you consider yourself a journalist? >> yes. you know, i believe, people have called me a historian, so i accept that reluctantly and the sort of widest and most generous definition of historian. i'm not an academic historian. i don't work for a living per se at a journalistic organization, but i believe that in the course of collecting the evidence of history, one has to apply not only the historical standards of scholarship which are in many cases much more rigorous. remember, it was philip graham of the "washington post" who said that journalism is the first rough draft of history. that's a wonderful phrase except when you realize that nobody ever turns in a rough draft. and so what we see perhaps in this case is a really sloppy,
9:14 am
shoddy rough draft. and in history we have to be much more mindful to try to triangulate with multiple sources, to take states more accurately by finding them, what kind of historical record covered it. so i guess in a sense we are. certainly in this case, because it is in the recent history and journalism and it is ongoing. and we felt in this case we removed it's stylistically quite different from many of our other things. it has an editing pace in places that are energetic. the hip-hop that was beginning to be developed, the fitting the chaos and anarchy that seem to be set this up and is without a narrator, a third person narrator which is a feature of everyone in my fields. we did it in favor, a much more rigorous -- only a few handful of internal title cards that advance the materials were the conversations and the archival material didn't permit us, we fill in the gap. we did that in a way to be as
9:15 am
journalistic as possible. >> the film takes us back to 1989 and talks about the rush to judgment by media, the public, obviously the legal system. do you recall your own response back then? >> i live and work in a little village in new hampshire, but in the case of the civil war, because i wanted to work with an editor, i did the editing in new york city and i commuted weekly in new york. and i was in new york editing the civil war series when this happened. and one couldn't help but be buried in the avalanche, the economic of coverage. it was on every local news station, on every national news. it was on every tabloid. new york have more tabloids. they were all in tense competition screening for the loudest kind of headline. it was hard to miss, and as i said before, i felt like oh, my goodness, what's happened? a sense of falling in a bottomless pit. what's happened our society? what's happened to families?
9:16 am
and i did know much later on from the distance of new hampshire that when they were come had convictions vacated, it got such little notice in comparison, and so little notice that it didn't permit those other forces to sort of suggest these same alternative narratives. and the city still maintained, well, they finished off what race began, or they started what right is finished or they must have bee done something to or we were just acting in good faith. they vacillate like ping pong balls between much argument to fit the absurdity of the situation. and all of them are fraudulent, and the reason why, and we begged them to participate in our film, the reason they did not is they could not answer any of the questions we would ask them about this case. >> follow-up to the earlier question, a person asks, at the time that this is all being reported, did the journalists have access to the confessions?
9:17 am
could they have seen the inconsistencies that were cleared out in 2013 when you watch the film? >> that's a good question. i wish my daughter were a. she would have instantly. i'm not quite sure. they were put in their entirety at the trials and journalist covering the trial and there were many, could have pieced it together. the one juror that we interviewed for the film, the one holdout, was smart enough to sort of see what was going on and feeling that the detectives were lying, saying we didn't consider them suspects, which was crazy. they consider them suspects from the get-go. they just asked them questions, you know, what happened. this is horrible. but they have been available from the moment the trial, if not before. >> the film, of course, does mention the other victim, the victim of the rape in central park. but she's not interviewed in the thing. what reaction, if any, has she given to its? >> i don't know if trisha meili -- i can say her name.
9:18 am
we do not normally say the names of rape victims, of course, but she herself wrote a book called "i am the central park jogger," and detailed her extraordinary recovery. and she has no memory of what happened. when she woke up after several days, weeks, the first people she met were the medical team that saved her life with the police and prosecutors, who filled in this permanent neurological gap she has about what took place that night. thank goodness she removers putting on her jogging thing and nothing until she woke up. thank goodness. and here, all of you said as she is about to go public for the first time, and one can imagine the agony of that decision, she is suddenly learning a narrative that she is believed for so long didn't actually happen that way. and i spoke to her several times during the production, asked to participate, respected utterly her decision not to. and i correspond infrequently
9:19 am
with her, letting her know that the film is playing near her and giving her the heads up and a warning that it will be. and i think as you would agree, having seen the film, that there's never a moment in the film when we don't actually return again and again to her extraordinary recovery and progress, and understand it was first and foremost primary victim to which we added six more, five more and their families for a total of six. >> questionnaire, he saw the film, it's is there so much more i want to do. what happened in prison? what are "the central park five" doing now? aren't any of the police bring more so? maybe you can give us an epilogue on some of the. >> as the film said, the police reinvestigated themselves after the district attorney had reinvestigated and had moved to vacate the conviction, and the judge agreed, and the police reinvestigated themselves, surprise, surprise, found the police did nothing wrong.
9:20 am
except jim dwyer, "the new york times" call was pointed out have gotten the wrong guys and more importantly let the real god continue to rape and murder subsequent to that. -- real guy. there's been no real remorse expressed. it's been the exact opposite, a sort of content for the five. and their extraordinary journey, deliberate from this hell. spent and what about the five now men, can you tell us about where they are not? >> yeah. they are remarkable group of human beings, as i hope i could communicate in my remarks. they all suffer as many other family members to do from some form of what we would all called ptsd. we all know what that is from battle. we know that occurs also from psychological trauma. antron mccray did not even agree to appear in the film out of this ptsd, we were only allowed to report his -- record his voice, changed in, escaped
9:21 am
first in maryland and into the deep south where he works as a forklift operator, keeps his head down, pays his taxes as he said, takes care of his kids. and i think still feels that someday somebody is going to come and his hand is going to come and grab his shoulder and say, come this way. we were able to get in contact with raymond edison and we're able to lure him out for the closing night of the film festival on november 15 when he appeared for the very first time since they were all together in a holding pen during the original crime in 1989, that they were altogether because he's been -- the other four are all in new york, all potential in the same neighborhood. use of is perhaps the most successful. he has a good paying job. he does i.t. for health systems. he's got several kids from two different relationships. he's an amazing human being and a great father. both kevin and raymond have jo
9:22 am
jobs. to raymond works for an employee's union. i can't remember where kevin is. they come out with us frequently, particularly yusuf and raymond m. and we see them a lot. cabin as well. and cori, too. cori has been to me was the oldest, a 16 year. is now 40. he has been disciplined for a long time in some ways suffers in ways because of these disabilities that the rest have not. they weigh on him in a different way. the amazing thing is they are a like to continue as they would make it through the. no conspiracy, but just a sense that in this new era of the new jim crow, i think it was just assumed that they disappear and the mistake of we got the wrong guy could be covered up just by the fact that these lies would disappear and instead they've made something of each other and remind us daily of a kind of heroic perseverance that i only wish i had myself. >> you talked a bit about the
9:23 am
film becoming a press freedom centerpiece. what was it like having your work, your notes, your video under subpoena and having to fight at that as well? >> well, you know, it was a mixed blessing. it was something incredibly foolish about a city deciding to subpoena our records right in the middle of us releasing our film. [laughter] you know, this is a publicist a dream, right? [laughter] is it not a publisher to dream? at the same time there was something that created i think, and i think i could speak for sarah and dave as well, there's something that struck at our debt. there was that feeling that you have sometimes. maybe when you're driving too fast and you see the blue lights behind you, but this was serious. this meant something. and this assault on our efforts, particularly the irony that we'e
9:24 am
spent so long, we have been so conscientious and diligent in asking every six months for the cops and prosecutors involved to please comment, please comment, please come. some wouldn't even onerous with a return phone call to say no. they would just be unanswered e-mails and unanswered voice messages, that they would then start coming out with, this is something they said they needed, that this is the important for the investigation. and more than that, that they could and had rights to this because this was, as they put it, a one-sided advocacy piece. and you just know, my goodness. >> what about the defense lawyers? where were they? why didn't they protect their clients at that time, establish the reason not to find these boys guilty of the time? >> it's a really sad aspect of this case, with the exception of mickey joseph was a court
9:25 am
appointed attorney for antron mccray. who did a really good job serving antron. ultimately, antron was found guilty and went to jail. the others were friends of the family. yusef salaam's attorney was a divorce lawyer named bobby burns who was incompetent. teater rivera handled raymond santana's case. he was out of his depth. the other attorney, i kevin his name offhand that serve kharey, was sorted equally more political but you have to understand, at the time everyone just assumed they were guilty. they were guilty, they had confessed. the question is, what soapbox this might represent for one attorney, or what could you do to mitigate this for another attorney? forgettinforgettin g that staring him right in the face was all this exculpatory evidence that they were not using, that the fact that they were someplace else when the assault was taking place in the park.
9:26 am
and people were not getting this together because the crime was a lurid, the coverage was so great. and african-american papers bought into it. most of the relatives shunned him and ostracized these five boys. they assumed they were guilty. the tragedies within each of the families are so -- it's hard even in our limited time to recount them, but suffice to say, each of them suffered in the obvious way that society had intended them to suffer. by going to jail. but also in the losses that happen within their own families, deaths of people who never saw them exonerated. mothers and fathers, parents splitting up, he rose in the eyes of antron from his father was a seasoned a super hero who'd been at some point in interrogation said, tell them tm what they wanted to and from that point on, antron began to make up things. and if he hadn't, if his father said stick to your guns, they
9:27 am
stopped talking to the father and the mother broke up. they reconciled when antron got out of jail, and antron still wouldn't talk to them. he got sick and die, and it's only later, after the painful memory of seeing his father lying dead that he suddenly realized what forgiveness could be, what it is. and antron has to go to his grave with all that was blasted, just by the slight chance. at one point the friends of kevin are playing basketball and they say come play basketball. and you can see his eyes going, what if i done that committees relating to his on camera, you know? raymond santana's father said don't stand in the street corner, go into the park, it's safer. and he starts to break down and cry, realizing the fate he had just now commended his son to. >> we are almost out of time, but before asking the last question i've got a couple of housekeeping matters to take your. first of all i would like to remind you of our upcoming luncheon speakers. on april 15, we have olafur
9:28 am
grimsson, the president of iceland who will address the global race for resources in the arctic. on april 17, we have the director of the office of national drug control policy, and unable 19 we will have patrick donahoe, the postmaster general of the u.s. who will discuss the challenges of meeting the involving demands of the nation's postal service. second, as i noted earlier, this is the eighth time that mr. burns has come here to speak at the national press club. each time -- spent i overstayed my welcome. [laughter] >> we can schedule the night whenever you're ready. each time we have an inherent we are reminded that only that he iis about standing for michelob does reveal much about our world completed also an outstanding speaker. when the press club began in 1908, the spoken word was a noble art form. now we have evolved to the five-second soundbite and we would like all of those things, but fewer and fewer people are now as gifted in the use of this
9:29 am
podium and this microphone as is mr. burns. when he visits he not only delivers an epic speech each time, but in doing so he reminds us of the great speakers who have come before him, such as our first speaker, franklin roosevelt, the artists such as the renowned albert hitchcock. mr. burns owners our tradition of being part -- our tradition. he is truly more than our guest today. the house through spoken word become part of our club and our mission. so today, at the time we would normally give you your eighth national press club coffee mug -- [laughter] -- we decided we are not going to give you another coffee mug. instead we're going to recognize your contributions to this organization by making you an honorary member of the national press club. [applause] >> i guess i am a card-carrying
9:30 am
journalists. thank you. >> you are supposed to answer one more question. >> in 45 seconds. >> this film of course as a ken burns film that a ken burns films a dozen of ken burns' voice in a. will we hear your voice again in your next production? >> well, i've never put my voice actually in the field. it's always been narrated by someone else, but that narrators a voice in the editing room has been one. i think what's important, not only with this film but all films i've made, is that they are not my. there's a convenience in our society that gets everything down to 140 characters. but a film by ken burns is a reductionist thinking about this is a film by sarah burns and david mcmahon, and also ken burns. and all of my films share coal producers and directors of equal importance. and they should be acknowledged. and i wish particularly today
9:31 am
it, at this great honor, that they were here with me now. thank you. [applause] >> thank you. thank you all for coming today. i would like to thank the national press club staff from including its journalism institute and broadcast center for organizing today's event, here's a reminder that you can find more information about the national press club and get transcript and video of today's event at thank you. we are adjourned. [applause] -- >> [inaudible conversations]
9:32 am
>> [inaudible conversations] >> from the national press club, live now to the american enterprise institute for discussion this month on north korea's nuclear program, and recent tensions with south korea and the u.s. this is live coverage that is just getting under way. >> i'm going to introduce everybody quickly and we'll get right into it. >> just going to go right on down the line. nick eberstadt holds the political economy at aei. is a senior advisor to the national bureau of asian
9:33 am
research. is a political economist and demographer by train. he has published over 400 articles, many books. of course, he's an expert on korea. korea. he's a founding drug abuse committee on human rights in north korea and the last year he won the very procedures bradley prize. next, just in time, bruce is the senior research fellow for northeast asia at the heritage foundation's asian studies center. ruth joined heritage in 2007 at the 20th in the intelligence community. during which time he worked at the center intelligence agency and the defense intelligence agency. in 1993 he was appointed the cia's chief of the cia career branch, and later was deputy chief for korea at the cia's directorate of intelligence. dan blumenthal is a director of asian studies here at aei where he focuses on east asian security issues and sino-american relation pics also a founding board member of the alexander hamilton site answers on the board and the u.s.-taiwan business council. he served on the u.s.-china
9:34 am
economic and security review commission from 2005-2012, and during the first george bush administration he was a senior director for china and taiwan and mongolia in the department of defense. he's also the recent co-author of a book on u.s.-china relations, and awkward embrace. vice president and political and security affairs at the national bureau of asian research where he manages several in the our research programs on political and security issues in asia. he previously was a fellow at the center for new american security and he served in the pentagon as director for china affairs in the office of the secretary of defense. and last but not least, tom-tom is a defense and security policy analyst and codirector of aei's maryland where center. is the co-author of numerous books including lessons for a long work, and ground troops, the future of u.s. land power. and with that i'm just going to go in and turn it over to nick.
9:35 am
thank you. >> thank you much, much. i thought that i might spend just a couple of minutes discussing some of what we might call domestic politics in north korea that have been perhaps informing the theatrics that we have all been thrilled by over the last few months of the dprk. we don't always think of it this way, but the north korean system, like al our other politl system, operated by human beings does indeed have domestic politics. and if we pay attention at least or try to pay attention and try to understand some of the domestic politics entailed, we may be better placed to deal with some of the external manifestation and loveland that they're sending us and so forth. to begin, we need to talk about
9:36 am
not the current ruler of north korea, but his daddy, kim jong-il. kim jong-il was not a bad king. he was an extraordinarily bad king. he was a disastrous the king, for that system. and i'll explain what i mean by that. he had decades of preparation accorded to him for his reign. his father died in 1994. in 1992, two years before that, his dad told foreign reporters that his son, and jong-il had been in charge of day-to-day policy in the dprk for the previous decade. that takes us back to the early 1980s. and if you want to get into real inside baseball, north korean
9:37 am
media was talking about the rise of the party center in the 1970s, party center thing eventually debuted as kim jong-il. kim jong-il had about almost a quarter of a century of grooming before he became the actual dictator of that country. he had a great long period of experience, of time to consolidate his authority. with his hands on the dashboard, he nosedived the plane. he was the mastermind of history's only peacetime famine for an urbanized literate population. he also, more or less, effectively destroyed the institutions of party and state. so that by the late 1990s and early 2000s, there was no correspondence between what the party was supposed to look like
9:38 am
and what the cabinet and state system was supposed to look like. and when he was actually operating the government. he was no or less running the country out of his bathtub with a couple of secret police forces to kind of help. and he paid no attention whatsoever to continuing the dynasty. he was completely effect a list on this. there was no reconsideration of out who was going to rule next and though after he had his stroke in 2008. and then they had to play catch-up ball really fast with a very young man who had no military experience and no government experience at all. so this takes has more or less to where we were when kim jong-il died. and kim jong-un had two things very much on his mind at that time, one would imagine. one was consolidating the throne, and one was consolidating the state. because both of those were somewhat part of state.
9:39 am
he had a brother over the seas in macau, older brother, potential successor who said that he was opposed to this half brothers rule, or to hereditary succession. he had a wicked all cold and a wicked treachery, who are his advisors one might say. regencies don't always work out terribly well in korean history. and they work out less well when the alternative successors. they have a sound of their own who was a little bit older than him. you haven't heard about him in the news i don't think at all. people look at them for the future. so there's a throne situation. there's a state situation. at the funeral procession, there were eight people come one of them kim jong-un, three of the people behind him on the right
9:40 am
side of the hearse, for military people on the other side. three of those were military people have suffered very bad experiences with their careers since then. this is not necessarily a situation of dealing with hardliners and moderates, which is a siren song we've heard since the early days of the soviet union. this is not a moderate hardliner thing. this is getting rid of military people who were not under immediate state control for the system. so last year we didn't hear much, we didn't have much at all in the way of saber rattling by north korean standards. there was a failed missile test and after that there was a bit of quiet. now we are seeing the familiar old shake down can start again, which tells us something about perhaps where we are in the consolidation of throne and consolidation of state. just two observations about is as this game proceeds, and we
9:41 am
have -- my colleagues will talk more about this, but i think we have seen this game before. there were going to be, surely going to be calls for negotiations with kim jong-un and kim jong-un's government. bear in mind that negotiations with the united states, with rok, with japan all legitimize and ratified transport rule. whatever else they do, they are a signal to home that this guy has engaged if you will be outside world on his own terms. and it reads very well back home. the second thing, concerns, face saving. we will also hear of a great deal of discussion in the days and months ahead about coming up with some face-saving solution for the crisis we're in right now. and, of course, the north korean side wants face-saving solution's. given where he is coming from,
9:42 am
given his calculations and given the circumstances of the state, i submit that kim jong-un and company can stand to lose a little bit of face when they play this way. they deserve to come and if we are smart we will try to arrange that outcome every time we have a pleasant situation like this. thank you. >> thanks, nick. >> thanks to much and thanks for the opportunity to be here them and apologize for being a little bit late. the beltway was at a standstill. had to lead the police on a merry chase to give you. my laying in the road is south korea. south korea's approach, the military preparedness and military reform since 20. so it will be perhaps a bit more tactical. but what its community what it will be discussing is south korea is much more likely to respond to a north korean military clashed than in the past. every south korean president has
9:43 am
always vowed that the next time they would respond and vinegar. but i think the situation has changed, not only in the blue house but also really in the light of olympic as well as the political landscape. first of all, park geun-hye, the new south korean president, has vowed both publicly and then in private to respond forcefully and really exponentially the next time north korea does an attack. and why would this be different from all the previous korean president vows is, in my discussions with senior officials in her administration, they made very clear that they were very critical for not retaliating for the young -- attack in 2010, and they vowed that she would hit back. sort of more import wave and that even before her inauguration, her predecessor made a number of changes in the south korean military. that would have led him to respond more forcefully how do
9:44 am
been another attack. if you remember back after the attack and he was criticized very strongly by the south korean public for not hitting back. there was an initial 80 rounds that went northbound from south korean military units but there was no follow-up response to the immediate come within the first 15 minutes. he replaced his defense minister with a much more forward leaning defense minister who remains in park geun-hye's administration and more important he ruled that he change the rules of engagement are previously the rules of engagement for south korean units on those islands to the disputed islands, the disputed area was that for every incoming round of north korean artillery, south korea was allowed to respond with one round of equal or for lower color. so corporal comes out and killed clicking, okay, was that a 152 or a 122-millimeter? i'm not sure. i'll put in the item category. so young block get away with it. and he also gave an interview at
9:45 am
the end of his administration saying, he had ordered that south korea's 15 k. fighter-bombers to respond. but have been told by his military assistant that he wasn't allowed to do that under the rules of engagement. that instead he would need permission from the united states. now, if you talk u.s. forces, korea officials will say that's not the case but at least that was the perception by myung-bak. on a talk with south korean intelligence and military officials at the time who said that was the perception that they were not allowed to use the f-15 k.'s without u.s. permission. that also has been removed. admiral mullen, chairman of the joint chiefs of staff visited in december 2010 and a public statement basically saying, it's their place. they can do with it as they see fit. and then privately there's also been not necessarily a release at least a change in perception. so even under myung-bak demonstration, they have said that they would respond sort of
9:46 am
on a three to one ratio. if one artillery battery attack, they would take out three. and then what we have seen in the park geun-hye administration is that a spokesperson for the joint chiefs of staff publicly said they would not only limit them, they would not limit themselves to the point of origin of the attack. they would also take out supply elements and command element. there was some confusion as to what that meant, but the military official sort of anonymously or privately said that what they were talking about was not on when and not supreme headquarters of pyongyang but also not something like an artillery battalion command. they meant something like headquarters which would be an escalation clear that as a target that is a higher echelon and is further to the rear. ..
9:47 am
>> south korea reversed the planned cuts to the marine corps and instead augmented with 4,000 additional marines, and they've also increased the procurement for antisubmarine warfare including mine sweepers, antisubmarine helicopters. they've augmented forces, they've lossenned the rules of engagement and pushed it down to a lower echelon. now, how would the u.s. get involved? just last month the u.s. and south korea signed a
9:48 am
proliferation or a counterproliferation or -- let me get this right, combined counterproliferation contingency plan. the details are unknown, but on the one hand it seems to require south korea to confer with the u.s. before responding to even a tactical level response. so on the one hand you could see it as a way of the u.s. inhibiting the south korean response. on the other hand, it would involve the u.s. in a combined response at a lower level of clash than would normally be the case either under the armistice or the united nations command rules of engagement. so we don't know the details of it, and it very likely would depend on the situation. but all of that, i think, is more likely to make it, make a south korean response and an escalatory response more likely. also under a proposed defense reform plan that hayes has
9:49 am
before her from her predecessor, south korea has switch withed to a proactive deterrence strategy. and that means if they feel that they have imminent signs of an attack, they will preempt. but defense officials point out that that is more likely to be in a strategic threat rather than tactical. so that means, you know, if they feel they're about to get hit with some artillery in a west sea island, they're not likely to initiate, they'll instead absorb it and then respond. what they're talking about is more a situation where if they see a missile, they think that it's nuclear armed, it's at a time of hostility, it could be a, an imminent attack on south korea, then according to the new strategy they would take out that missile. now, that requires perfect intelligence, and you can never tell what kind of warhead is on a missile. so if the situation now is perhaps even at a higher tension
9:50 am
right now and they observe scud missiles, would they take those out? we don't know. but, you know, my time is up, but i'll just lay a marker for during the q&a we can get into, if you want, the recent dia report about north korean nuclear capabilities, what it means, what it doesn't mean as well as senator kerry's trip which, in a nutshell, i think we were eyeball to eyeball, and john kerry blinked. so i think now, actually, we are at a less likelihood of a military clash than we were before. thank you. >> thanks, bruce. >> thank you. um, i have to say, first, as a caveat, i suppose, a lot of the suggestions that i'll put on the table are probably not just in the washington parlance obe, overtaken by events, as bruce talked about senator kerry's trip, but probably never were in consideration in the first
9:51 am
place. so that that's a strange way to begin a talk, i know. [laughter] but let me put some of the ideas out there anyway in case anyone wants to take them up at a different time in our political life. so i wallet to focus, first -- i want to focus, first, on the case of a chinese town called don nong, and i want to focus on it, because i want to focus on the lack of seriousness by the chinese when it comes to doing anything of any substance or merit in terms of shutting down what everybody agrees is a criminal enterprise that has state sovereignty which is the state of north korea. so with some fanfare for people who watch these things, the chinese shut down a branch of a bank, a north korean bank recently that was, that funnels
9:52 am
currency into north korea. however, in the town of can -- don nong as the telegraph reported this weekend, about 70% of $6 billion in north korean trade nows, and maybe another 150% on top of that $60 billion is done through dan nong on the black market going into north korea. it's a place where north koreans, leaders and their agents, come regularly still even up to a month ago to buy all the luxury goods they possibly want from iphones to caviar to swedish pornography or whatever else they are into. i'm not judging, i'm just saying that's what they like. it is also a place where a pipeline that pipes oil into north korea, at least a point on the pipeline, which provides
9:53 am
north korea with 80% of its energy needs in total. now, the branch that was closed down in dan n be ong of the north korean bank matters very little because there is something called the bang of dan dong which on a regular basis, even up to last week, was reported it's constantly used to transfer currency back and forth between north korea and china. and that hasn't stopped, not a whit. the chinese interviewed in this various reporting as i looked into the issue basically said the shutting down of the north korean bank was a little bit of an inconvenience, but, you know, business comets. continues. in fact, since the, i would argue, successful policy of 2003 and 2006 which ended up -- one
9:54 am
part of this policy was to go after north korea and actually call it what it is which, i think, policy based on facts is always a good policy, a prime money laundering concern. the entire economy is a prime money laundering concern, and the famous sanction on the banco delta asia in macaw which actually tracked down successfully kim's own money, that's the father, and scared the bejesus not only of the north koreans, but of the chinese banking system because they don't know what they have in their banks. but since that time, the north koreans have expanded and diversified their linkages with smaller chinese banks which are even harder for us to track and harder for us to find. nearby dan dong is port of -- not too far, actually, is the port of call dalion. it's a transshipment point where lots of things go on, north korean ships or flagships or
9:55 am
ships that are flagged by other countries or whatever it is. and recently just a couple years back the south africans found one of these ships as it came into a south african port headed for congo filled with chinese rice and wheat, filled at dalion, and north korean weaponry of of all kinds that, obviously, had been inspected in dalion and found to be okay and okay for onward proliferation to congo. let's look at a couple other statistics so we don't just pick on dan dong. the mining sector between china and north korea, well, mineral exports to china has quadrupled during this period of 2008-2011 of strategic patience and tough financial sanctions and what have you and various u.n. resolutions and so on and so forth.
9:56 am
while trade may have doubled during that period of time between china and north korea. so china is about a $6 billion trading partner of a $40 billion economy. according to marcus nolan, one of the prime watchers of north korean economics external and internal, north korea may, in fact, be running a trade surplus which i think would shock a lot of people for any poor country, meaning it's exporting capital. north korea's exporting capital. where is that capital going? well, probably mostly to banks in china for the kim regime and luxembourg and switzerland and other locales. kim jong un may have up to $5 billion stashed in any one of these banks. also just to be sort of bipartisan here in my criticisms, since 1998 north korea has used a lot of this
9:57 am
hard currency to spend up to $3.2 billion on missuggest programs -- missile programs since 1998. through thick and thin, through sanction and nonsanction. well, how do we make sense of all this, particularly in the case of china? i think we all agree, probably everyone in this room and probably our chinese friends as well, we all agree north korea's just one big criminal enterprise that happens to enjoy state sovereignty. but china will not do what it takes to shut it off. and without it we can't shut it off ourselves. so why is china acting in this way? well, first, history, of course. the struggle for centuries with japan over the korean peninsula and the u.s./korean war and all the memories of what might happen in terms of allowing korea to completely be in the hands of hostile powers. the second would be strategy, avoid encirclement, enjoy stability on its borders.
9:58 am
the question china asks, of course, which it's entitled to ask is what if kim collapsed? what would you do about a surge of south korean and u.s. forces coming into north korea to secure wmd and secure refugees and so on? and what do you do after that with those forces? and a third is incentives, and that actually points at an answer. while china may be somewhat irritated at north korea, the calculus that china has, the risk calculus very much favors the status quo. and why is that? it's for the reasons i said before. why would china want to take any risk of helping to bring the kim regime down if all it gets in return is a flow of korean refugees and south korean and u.s. forces close to its border? well, in my time in the government i witnessed for a very shot period of time what does -- very short period of time what does move the chinese
9:59 am
to put pressure on north korea, one of which was the actual, credible threat that japan would go nuclear. that's gone for the most part. it may return in the next few years, but it's basically gone. the next was the belief that george w. bush was just craze su enough to strike the nuclear facilities -- just crazy enough to strike the nuclear facilities, particularly after the iraq invasion. the other thing that got the chinese attention was, indeed, designating north korea as a prime money laundering concern. because, again, the chinese were very concerned that we would take that to its full extent and find chinese -- fine chinese banks to be aiding and abetting a prime money laundering concern which means they could not do business with the international financial community. but i'm going to speculate that today for a variety of reasons dating back to 2006-2007 when the bush administration decided, essentially overnight, to remove all the levers of coercive power
10:00 am
it had on the north koreans and up to today. i'm going to speculate that the chinese do not believe the u.s. is credible either in military action to defend itself or its allies. and when i say defend, i'm talking about some of the things that bruce is talking about, said before. nor is the u.s. really credible in shutting down the criminal enterprise. because if it was, it would take harsher action against chinese enterprises that are involved in this criminal enterprise. so the answer is change the risk calculus. that means be credible. credible in your threat to take out nuclear facilities and ballistic missile sites, credible to respond to threats disproportionately. this is not a gentleman's game of cricket where they whack one site and we say we're going to whack another site like a statue.
10:01 am
be disproportionate. we are still the superpower here. credibly shutting down the criminal enterprise which means going after any institution that is aiding and abetting the money laundering of the kim regime. and, of course, this calls for concerted effort among all financial centers the world over. um, my time is up, and i'm, again, putting those ideas out there which, at this point, are probably fairly useless considering the news today that we're getting into direct talks with the north koreans. i guess as a, an exchange for its belligerence. but hopefully, one day i hope that some of these ideas percolate back up to our collective political leadership. thank you. >> thanks, dan. gabe? >> thanks, mike, and thanks to aei for inviting me to
10:02 am
participate with such an illustrious panel. i've been asked to go over u.s. strategy and policy regarding north korea. um, and i think that some of my analyses, some folks at least on this panel may disagree with, um, which is probably why they invited me, so we have a nice lively discussion and keep things interesting. so, basically, i'm going to go through my take on where we've been in terms of nuclear negotiations with north korea, where i think we are now and potentially where we're going. so in terms of where we've been, looking at the history of nuclear negotiations with north korea is a great way to get depressed quickly. we've had decades of negotiations on and off with north korea which, i think, overall you can say so far have been a failure in that they have not prevented or reversed north
10:03 am
koreans' pursuit of nuclear weapons. and in this history of negotiations, we've pursued a wide variety of mixes of carrots and sticks to try to cajole, encourage them this some way to give up their -- in some way to give up their nuclear capabilities. so far, ultimately, we've not been successful in this endef. of even our successes that we've had over the years have been partial at that. the agreed framework, which i count as a partial success, before it was initiated, um, some people in the u.s. government assessed that north korea would be able to produce up to 100 nuclear weapons by the year 2000. and when that deal collapsed in 2002, they had a handful. certainly not a success, but -- complete success, but certainly better than if nothing had happened. similarly, the banco delta asia sanctions were successful in that they put pressure on north
10:04 am
korea, put pressure on china. but they did not prevent north korea from continuing to pursue its nuclear capabilities. the 2007 agreement that was reached which i do also have problems with did result in the destruction of a cooling tower which is a good thing, but it did not stop their nuclear capabilities. especially the pursuit of a uranium capability that was admitted to later on. and throughout these negotiations at times we've heard our alliance partners -- alliance relationships at times going further in negotiations than our allies would have preferred. um, and ultimately, beyond the nuclear program these efforts, the carrots and sticks, have not only failed to prevent north korea from pursuing its nuclear capability, but also from developing its missile capabilities, from proliferating military technologies and from conducting low-level attacks against the republic of korea.
10:05 am
so that's the case for depression. the model for success has yet to be found. even's always trying to develop the unified field theory of north korea policy. what is the exact right measures of carrots and sticks? what's the right threat? what's the right offer to give that to them? i'm not saying that unified field theory isn't out there, we just haven't found it yet. so where we are in terms of where we are with the obama administration's approach, um, generally referred to as strategic patience. my take on that, i think there's an assessment coming into the obama administration that in the past the united states had overreacted a bit to north korean provocations and overtures, that when there was a hint from pyongyang that they may be willing to make some movement, that we would do everything we could to get to negotiating table, and there wouldn't be that much coming out of that.
10:06 am
similarly, when there'd be a provocation, we'd kind of ramp up quickly. there was a sense we were a bit dancing to north korea's tune. we wanted to see if we could break that cycle. so in the first few years, we saw a few overtures, a few threats coming from north korea, and we generally stuck to our guns, stuck to our principles, kept the door open for discussions, but under the conditions of what north korea had already agreed to. but i think it's important to note that we should not confuse strategic patience with standing still. the u.s. has been fairly active in its approach to north korea more broadly in terms of enacting robust sanctions against north korea, working in the u.n. and other fora to enhance our sanctions and to isolate pyongyang. also the efforts to enhance our alliance and partnership
10:07 am
capabilities, enhance our military presence in the region under the umbrella of strategic rebalancing, also buttressed allied confidence. if you look back into some messages that were coming out of especially seoul with but also tokyo in the years before rebalancing, there was a lot of concern that our commitments in iraq and afghanistan and elsewhere would limit our ability or our willingness to come to their defense. i don't think that's a message that we hear anymore. that our allies have been fairly reassured. we've also been enhancing our ballistic missile defense capabilities as a result of enflamed north korean threats. so currently we have allies that are fairly more reassured than they had been in the past. our ability to defend ourselves and our allies is better now than it was in the past. so far we've deterred attack. it's impossible to prove the opposite of that, that had we not made a move, then they
10:08 am
wouldn't have been deterred. but so far it seems so good. and we're also making sure to provide off ramps for north korea which i feel is an important element of any strategy especially in a crisis. it's probably something that we can discuss later on. um, also i think we should realistically acknowledge that we have had some movement with china. i share dan's, um, skepticism about china's willingness and if not ability, then functional ability to really tighten down on china -- on north korea. especially when it comes to its nuclear programs. but we should also acknowledge that china did vote for more sanctions in the u.n. and that the recent tensions with north korea have, um, generated a discussion in beijing about whether or not continuing to support north korea is in
10:09 am
beijing's continued interests. and this is a discussion that's happening at a level and an intensity that we hadn't seen before including messages from people's daily and other official state organs telling north koreans they need to back down. now, of course, you know, this is with all caveats, and i'm not expecting china to come around to whatever it is we're expecting china to do on north korea, but i i do think we have seen some movement, and it's important to acknowledge it. so where we're going, um, the fundamental problem in terms of having an undesirable choice between a problem that will be difficult to solve and an unacceptable status quo, that dynamic has not changed. and it's probably not going to change. i expect that we'll continue to tighten sanctions to enhance military capabilities in east asia, especially on the korean peninsula, and to keep the door open for talks. i think that's going to continue although i don't expect that we'll move beyond our previous
10:10 am
commitments about making talks contingent on north korea accepting its denuclearization capabilities. now, i think there's a -- we need to also make a distinction. i'm sure we're going to be talking about when to talk about north korea -- when to talk to north korea. i think there's a distinction that needs to be made between having open, formal talks and negotiations and having open communications. that open communications either through new york or whatever other channels are available is not a reward, but it's a smart way to try to manage crises. and that it's different than having open, formal talks, six-party talks or whatever framework it may with in. these are different things to talk about. i also think we need to think about, maybe this is something that bruce can comment on, is that as we look ahead about the potential for talks with north korea, to maintain a united front with our allies and partners over these talks.
10:11 am
that some folks in seoul have suggested that they want to make sure that we can have, that they can have talks with north korea even if they have not backed down from their plan to develop nuclear weapons. we've made those talks contingent on them acknowledging they're making progress on their denuclearization commitments, and some in seoul have said they may want to have talks with them even without that specific condition. there's a potential going forward that there may be some dating between those -- daylight between those two sides. we need to talk very closely with seoul to make sure as we move forward that even if we have different theories about how to talk with the north koreans or when to talk with the north koreans, that we maintain that united front and that we're both fairly comfortable with wrote we are going -- with where we are going forward. i think i'll stop there. >> thanks, abe. tom, you want to wrap it up? [laughter] >> no, not really. but i do have some things that i would like to say, and it is
10:12 am
something in the nature of a summing up. but really what i'd like to talk about is where abe left off, where we are and where we're going. but you can't do that without sort of reviewing the bidding thus far. the combination of what nick describes and what dan describes as something -- either a dictatorship that once was a cult of personality and when it's stable is a military dick today or to haveship and a criminal -- dictatorship and a criminal enterprise, i'm not capable of judging which one of those is correct or which trait is uppermost at any particular moment. but it makes for a regime that's a big, big problem. thus, we shouldn't be surprised that u.s. policy has been reactive and responsive. i am sympathetic not only to
10:13 am
this administration, but to the difficulties that past administrations have had particularly since the 1990s in crafting a long-term north korea strategy. [laughter] so i think at some level we just have to accept things as they are, and even though the koreans have been slowed and -- or have been slow in acquiring the ability to build a ballistic missile that'll carry a nuclear warhead, they're gaining on it, and that makes them a continuing problem. and that also limits what we can really do. nobody on planet earth has ever yet gone to war with a nuclear state. i don't expect that to change. however, the overall situation not just vis-a-vis north korea, but in the region is not, i would not characterize it the way abe did.
10:14 am
i, instead, seedy minishing u.s -- diminishing u.s. credibility, and in part the korean response and also japanese response is motivated by uncertainty over u.s. capabilities and whether north korea is worth fighting over in the u.s. calculus which is a pretty good question. it's also a good question for the republic of korea and for the japanese. so even if there's a 3 to 1 tit for tat ratio from the south to the north, you know, whether that's going to just make the south koreans feel better and hopefully they'll get away with that without to vocking a -- without provoking a 3 to 1 or 9 to 1 response in the return, it doesn't solve the underlying problem. back in the 1990s particularly at the time of the last succession crisis or turmoil,
10:15 am
the smart money in washington thought that the north korean regime would collapse. that did not happen. nonetheless, that doesn't mean it'll never happen or that the thing that can't go on forever will. and so this preparing, you know, in trying to think long term about this, it seems to me that that's the only circumstance under which we're likely to have a seriously important opportunity to do something strategically on the korean peninsula. and that opens up a whole set of questions about what would happen if the north korean state actually, or regime did collapse. first of all, it would be a state with nuclear capabilities and nuclear tough and nuclear people all over the place, and i'm sure that one thing that all parties could agree on was trying to secure those
10:16 am
materials, those people and whatever weapons exist. beyond that there's the question of what the future on the peninsula would be. the koreans would have a view, i think we would have a view, the japanese would have a view, and the chinese would have a view as well. possibly those would be views at conflict with one another, and if there were former regime elements, other sorts of insurgents on the loose in north korea, that would make for an ugly situation. and, thus, what i really want to end up with is a critique of the pacific pivot or rebalancing in, particularly in the way it's being interpreted in the pentagon as an offshore balancing strategy under the rubric of air/sea battle.
10:17 am
in other words, we're trying to figure out a way to fight our way into a contested space and to strike targets. and it's a particularly, meant to be a china-focused doctrine, but it's -- but it severely rules out or doesn't deal with the korea question. and so i think to conclude and to pick up the point from dan what should things look like if we were serious and to translate them into terms of military posture and military strategy, we would go backward rather than forward. in other words, we would retain and improve our posture and increase the size of our force on peninsula, rely less on
10:18 am
dramatic fly byes of b -- fly byes from missouri because they take an awful long time to get over the korean peninsula, and there are very few aircraft and bombing stuff in that circumstance will be useful but hardly the end of the story. and so i really worry that this pivot or rebalancing, and in particular the military therefore clauses which we're about to see unfold in the current pre-qdr rethatview thate in the president's strategic guidance of 2012 and in the qdr and driven by the budget crisis created by domestic politics and defense spending is one that will really have unfortunate repercussions for our deterrent posture in the korean peninsula
10:19 am
and in the region, but also our ability to generate the force to take advantage of of a genuine opportunity. again, i'm not predicting the collapse of the kim regime. and unless we are able to do something to fundamentally change the security situation on the peninsula, i'm not sure that i'm praying for it. on the other hand, it's not really up to me to determine the outcome. and if we're going to be reactive as we must be, then we ought to be prepared to react to unforeseen circumstances that are foreseeable although less likely, but ones that could generally make for a positive change but would require us to do a heck of a lot more than is in our philosophy at the moment or ratio. here endth the lesson. >> thank you, tom. thank you, everybody, for what i thought were really insightful
10:20 am
and interesting comments. i have a lot of questions. i'm going to limit myself to two, and then we'll open it up to q&a from the audience. my first question is for you, nick. you painted a picture of north korea or pyongyang in which palace intrigue is sort of the norm. in many your view, is it in u.s. interests for that palace intrigue to be settled or unsettled, and is there a way for the united states to play at affecting that even if it's only at the edges? >> we're, we're obviously looking through a glass darkly here, mike. take my observations for what they're worth which may not be very much. what do we know about the situation in the dprk near the top? well, we know that the, the new laws kim jong un is referred to in north korean propaganda as the dear and respected leader,
10:21 am
the beloved and respected leader. i think that gives us a pretty good guess that he is neither regarded as beloved, nor respected. so how do we, how do we move with this -- >> [inaudible] >> not a dear, nor respected. so what do we, what do we do to try to influence this situation in a direction that might be to our benefit and maybe to the benefit of, you know, even the slave population in north korea. i mean, i think that one of the most incisive and compelling sets of analyses about how to deal with dictatorships actually comes from somebody who's in this room, from peter ackerman, who's developed this whole approach towards nonviolent resistance towards dictatorships. and it's a lot easier in the less repressive state than in
10:22 am
kind of, you know, gold medal olympic totalitarian state to start thinking about this. but it's not too soon. we don't know about how cohesive the north korean dictatorship is at this point. it's in a -- we can guess it is in a very delicate situation because a boy who had no training was suddenly put on the job to be the son king and has an aunt and uncle who are kind of looking after him with their own kid waiting in the wings. i mean, this is not a recipe for stability in any situation, much less a totalitarian dynasty. so what should we be doing? we should be doing at least one thing that seems to be completely forgotten about now. it used to be called psy-ops, you know, psychological operations. if you want to stigmatize it, you'll call it propaganda.
10:23 am
maybe we should call it our own style of prop began saw to -- propaganda to put it in sort of a north korean frame woork. we should be starting to have an's soar thetic dialogue with the second level, the second tier of nomenclature in the dprk. they do not trust each other. they have no reason to trust each other. we want to encourage, we want to encourage a breaking of ranks there. the north korean side plays an awful -- pays an awful lot of attention to propaganda towards the south and, believe it or not, towards us. you may not know it, but the north korean government has announced that it has nuclear targets for every state in the u.s., for four presidents. for hawaii, for arkansas, not for georgia, and for texas, you know?
10:24 am
so we should, we should pay attention a little bit to trying to bring a message to the next level of north korea's dictatorship. because that, i think, is where things will start to get real interesting. >> thank you. and then my next question before i turn it over is open to anybody, and it's this question of, you know, the united states at least has announced that it wants to design proportional responses to any sort of provocation. is there any chance that kim jong un is willing to take a bloody nose and if that could, actually, if he could use that to reinforce his own leadership and present sort of somebody who's willing to actually step up and fight? >> this whole notion of proportionate and bloody noses and -- these are not controllable things. and let me go back to tom's point. i mean, i wish -- and this is
10:25 am
not to by any stretch pick on abe's comments, because, you know,ing tremendous respect for abe as an analyst -- but i wish we could get rid completely of the terms rebalance and pith. and pivot. and i'll get back to your question. because it doesn't reassure anybody. it doesn't, it doesn't reassure anybody in other parts of the world where we still have interests, and it doesn't really reassure our partners in seoul and tokyo in particular as they look to the the massive defense cuts that are underway as tom mentioned. you know, and, again, there's this danger that general marshall said about having feederitis. lots of times people campaign on
10:26 am
things and you expect them to modify which has occurred to a certain degree, but the notion that a lot of this pivot and rebalance -- not a lot, but a good portion was to dam the previous administration's iraq war and increasingly the afghanistan war. but i don't think it reassures anybody in seoul or in tokyo that we have decided as a nation to pull up and leave afghanistan. let's leave aside iraq. and it certainly doesn't reassure any, the oil consumers in japan and korea that we are somehow going to pay less attention to the places where they get their oil from. pivoting, though, to the question of proportionally, this is not something you want to put on the table as something you will or will not do. we need to have the adequate force force to deal with a range of contingencies that if you
10:27 am
begin the prospect of bloodying the nose of north korea, you are quite prepared to respond in kind of after they take their next shot. and the final point on this in terms of reassurance to our allies is that there was a very good study done by bruce bennett of -- was with the rand corporation -- that said that the requirements for stability in the south korea and north korea would dwarf those in iraq or anywhere elsewhere 600,000 u.s. and south korean troops would be needed. so, um, you have to be prepared if you're going to bloody somebody's nose that it's not just going to bloody their nose, it's going to rip their face off and that they will respond in kind. so i don't think we should be clear about these what we would do in any case.
10:28 am
>> um, what i want to avoid -- although i'm happy to do it -- is to have this turn into an argument about rebalancing. right? i'm happy to do it, but, you know, north korea's a big enough problem on its own before we kind of expand it out or escalate it, i guess, into other issues. although i am happy to do that if that's what you want to do. in terms of proportionality, i think we need to keep in mind what our objectives are. whether it's bloodying the nose or ripping their face off, the goal is to, or presumably would be to reestablish deterrence. and demonstrate that north korea can't act in a certain way without costs. whether or not, you know, as nick said, we look through this glass darkly. how kim jong un or the other people if pyongyang think about proportionality, how they would respond to this, i don't think anybody at least in this room
10:29 am
knows. you know, we can guess, but that's kind of based on our own assessments of how they see things and our own assessments that constitutes rationality. so i would not try to say that i could dare to know how they would react to these things. so i think the focus then needs to be on to demonstrate as much as we can that these things have costs and as visceral a way as you can and to reassure seoul and tokyo that we're going to back them up. now, in terms of what our actual plans are, i haven't seen them. and so i can't comment on whether or not they do reflect proportionality or not. i expect that it includes a wide variety of different options just based on the specifics of the crisis and what we believe our needs to be. in terms of the broader, the
10:30 am
broader plan, you know, if you want to rip their face off, that's fine, but you need to keep -- >> no, i didn't say that. i said that a bloody nose could turn into -- >> sure, sure. >> these things are not controllable. >> and i think that's one of the things when we talk about proportionality, one of goals is to demonstrate that we have limited objectives in terms of these things, that when we respond, that it's not going to demonstrate a -- it's not going to, it doesn't signal a threat to the regime itself, but is rather trying to deescalate, trying to stop things before they get out of hand. um, and i think i should probably stop there. if rebalancing keeps coming up, we'll talk about that. but my hope is we keep it focused. [laughter] >> you know, one of the interesting things about this last period is that the pentagon or the white house or both of them have a playbook for how
10:31 am
this was supposed to play out. in other words, that they thought of, you know, sequence of proportional actions that would express our displeasure going back to the end of last year about north korean behavior. and, obviously, that went awry, to put it mildly. although the sort of -- [inaudible] for this was supposed to be the navy because they blew the playbook by announcing that they were moving a second missile defense destroyer, you know, from wherever it was in the pacific a little bit closer to, closer to north korea. but unspecified location. and, you know, the idea that you'll be able to in the narrow sense chart out a reaction/ counterreaction question matta in the case has
10:32 am
always been questionable political science. but in this case, it's extremely questionable political science. so, you know, proportionality in north korea ought not to be mentioned in the same sentence. we have to think that is not a recipe for, you know, ripping faces off or anything like that. it is, and there's just a lot of stuff that we have to tolerate because they have, you know, nuclear weapons, and it's more important for them to wave tear arms and -- their arms and shoot at people to get attention than it is for us to blackmail them. that's just a dynamic that we have reenforced for decades, and it's very difficult to get out of that death spiral. >> for the record, because tv is running, i am not advocating ripping the face off. [laughter] i am making the same point that tom just made, perhaps more eloquently, which is the idea of limited war or actually trying
10:33 am
to modulate your response exactly the amount that it takes to punish without the north koreans actually thinking it's more of a threat has been impossible throughout human history. and because of the reasons that i think nick and i described about what the regime thinks, it'd be even more impossible in this situation. so a bloody nose, in our view, could look like a lot more in their view. >> and rest assured that when i said earlier that i wanted the regime to lose face in any confrontation -- >> okay. [laughter] >> -- it will be translated as ripping face off. >> okay. we're all clear now. >> i think it's too late. your new wwf moniker now. >> right. rip their face off. >> all right. let's open to questions from the audience. sir. and just, please, wait for the mic, introduce yourself and, please, ask a questionment -- question.
10:34 am
right here. >> [inaudible] >> thank you for all your comments. five years ago i was the chairman of the flesher school, and the dean was dean bosworth. at that moment i asked him, well, how do you spell the word sis mys, and i also said to him then the same thing that i've said now, why don't we try something different? why don't we put the top 10 or 5,000 of the military contact them directly on a still -- stimulus plan and say, look, if you and your family show up at any one of the four seasons in the world, you'll have a visa and a million bucks. now, that might seem tongue in cheek, but what it will provoke is an externality that lets them have a dialogue amongst
10:35 am
themselves about their relative loyalties. it's one thing if i go up to my friend in the military who identify been together with for years and years and says, look, i think the leader is an idiot, he's going to be wondering whether i'm wearing a wire. and that conversation is highly constrained. it's the same ting in all military dictatorships. be if i can say to him can you believe what these running capitalist dogs did? they just offered us each a million dollars to leave, and his friend says, well, that's just absolutely obnoxious, and i say, well, yeah, how much is a million dollars in local currency? what it does is it basically destabilizes the loyalty equation within the military. now, this is -- now, let me step forward. since that moment a woman named erica chen with wrote a book called why civil resistance works, and it won the best book on politics last year. and in that they looked at 323
10:36 am
insurrections, violent and nonviolent, since 1900. and what they discovered is that the successful of violent insurrections was 23% defined in the terms of thics rexes, their own goals, and the success rate of civil resistance movements, nonviolent resistance movements, was twice that rate. and in every case there was some element, the strategy beyond there was some element of inducing defections from the key pillars of support, mainly the military and the police, that determined the outcome of those conflicts. and so when i listen to this conversation here, i'm hearing this concept that the other side is a unity to be considered in a combined, in a unified element whereas you're not really spending and we haven't for the last five years -- and, by the way, it's the same exactish with the irgc in iran. we're not looking deeper into who's loyal and who's not and why they're loyal and why they're not and where the
10:37 am
opportunities are there. and how they, the least loyal, can interact with their own civilian population. let me make one last comment. we just saw what happened was that google when they created their google maps, somebody inside had enough courage to basically take a picture of the prisons and, basically, that went on the google maps. that's an act of resistance. we should nurture that, think about the dynamics of how we can aggravate that and see what kind of negotiating position comes back to us with respect to everything else we're doing. >> i mean, that -- it's very difficult to sort of be against fomenting, you know, divisiveness within the north korean leadership or the military command. the question i would ask you is, you know, more about the failure rates of, you know, which -- so
10:38 am
if you define who, you know, the universe and who succeeded and why, that gives you with, that's a useful analysis -- >> [inaudible] what we discovered was no relationship between the severity of -- [inaudible] and that analysis was done by chenowith and stephane and also confirmed by work done by freedomhouse. the key issue is not how difficult the dictatorship is, it's the participation rates potentially as an echo amongst the population. if those participation rates go up, the likelihood of success -- even go up from a level to another level -- the likelihood of success grows dramatically. >> and, again, the question is what's the implication for us? you know? it is a divisive, you know, divisions among the leadership,
10:39 am
do they lead to, you know, if that appears, then what's our policy response to that? is it just do we expect that it'll be expressed in terms of a moderated position by the regime because they're less stable at home? you know, possibly they could have the converse reaction and, again, what do we do? again, let's just imagine that there's a relatively nonviolent civil overthrow of the regime. that doesn't seem like the end of the story to me. >> well, the data also shows that when that occurs, there's a ten times greater likelihood of there being a democratic result because the participation rates than not. so that's the data. >> peter, with me you know you are knocking on an open door on this. i think this is exactly the way to go. i think this wins on its own merits, but it's only one part
10:40 am
of what should be, in my view, a greater strategy or approach to the current dprk problem. human rights, i mean, really being serious about human rights should be part of an approach. what dan was talking about, going after the criminal money trail, should be seriously part of an approach. and on the military side, i'm certainly not a military guy, but things like missile defense and real civil defense for seoul and other things that make the extortion game less likely to have big payoffs should be part of this. and they all are brought into a coherent whole if you have the idea of threat reduction. i mean, as abe indicated, grand settlements and negotiating breakthroughs are out of the question with this regime. it doesn't do that. it doesn't do grand settlements.
10:41 am
there are internal reasons it can't do grand settlements with outside powers that it regards as illegitimate, as fundamentally illegitimate. what we can do step by step is reduce the menace that the dprk regime poses to the united states and to our allies, and this will -- and if we think about reducing the threat rather than about nobel peace prize potential breakthroughs, we're going to be a lot better off. >> thanks. all right, the gentleman with the laptop. >> thank you. stanley colbert, also fletcher. you're surrounded here. following up on this question, i'm puzzled we haven't seen a coup. there were coups in the soviet union. the second one succeeded, coup against gorbachev failed, but they attempted it. mao's designated successor was
10:42 am
out in a short time. why is north korea the exception? especially because of something that nick said. there was very poor preparation for kim jong un. and he got rid of the military people, some of the most prominent ones. why didn't they see this coming and decide to preempt? i haven't -- why does north korea stand out in this way? >> 50eud just say we've had many, you know, dictatorships that survived numerous coups and assassination attempts. i think with north korea we had many attempts against kim ill song and kim jung-il that weren't successful. you know, like other dictatorships like gadhafi and saddam, they survived them. of there's a very pervasive service, services in north korea. there's, you know, four or five, and they keep track of each other as well as the citizens. you know, even the most brutal dictatorship in the middle east, i think, really pales in
10:43 am
comparison to north korea. there's, you know, the security services, there's the extremely cowed population, there's, you know, the lack of a cnn effect. you don't have the access by foreign media, so you can't have that image of the atrocity when, you know, the troops shoot on citizens which then is shined to the world and then, you know, that generates pressure both in the country and outside of the country. the communications is -- inside the country is extremely limited, very difficult for people to plan anything or even just as we've seen in other societies where, you know, they can use twitter to let's meet at the palace, or let's meet at this area. you don't have that in north korea as actually even you do have it to some degree in china. so, you know, and you also unlike, say, eastern europe you don't have, or other countries, you don't have a hovel, you don't have an an sang suu kyi,
10:44 am
you don't have a mandela for people to rally around. there's no informal proposition movement -- opposition movement you can sort of point to. there's no government in exile. so, you know, it seems, you know, until the moment it happens that you just don't have the conditions there like you had for the arab spring. so, i mean, obviously, you know, i've been saying sort of this for 20 years, and i'm always fearful that tomorrow morning we'll see the headline of north korean leader has been given a ..9 mm headache, but so far it hasn't happened because of all those conditions. >> okay. >> [inaudible] from hudson. it seems that one of the issues here is whether we and certainly the chinese are willing to, um, envisage the possibility of a collapse of the north korean regime. in other words, or to put it the other way, their strongest card
10:45 am
is the fact that nobody wants to see the regime collapse and, therefore, you know, just like the scene at the end of the maltese falcon where they, you know, they can't bill bogart because he's the one who knows where the falcon is. so the question is don't we have to convince them that, yeah, we're perfectly willing under the right circumstances to see this regime go. and the first step in that, it would seem to me, would be to try to discuss the post-kim future of north korea with the chinese. and, now, i don't know whether you'd get anywhere with them. but certainly they have, you know, interests about that regime that we've talked about, and some of those fears might be assuage bl, i don't know. if any case, the mere fact that we were talking about this with the chinese might have its, might have a very good effect in pyongyang as well because it would sort of suggest that, you know, in this last defense of te north koreans which is basically
10:46 am
their own defense in a sense as far as i can see that, you know, we'll hold our breath until we turn blue kind of thing would be gone if we at some point said, yeah, we're actually ready for, you know, whatever's going to, whatever's going to happen there. >> well, i agree. on all counts. i mean, the u.s. has been very mixed up about whether it wants regime change. i mean, it's kind of an odd situation because we announced time and again that we do have a strategic objective which is the unification of the peninsula under the rule of the rok which, of course, means that the dprk has to go, i guess logically. but we don't really, you know, that's sort of a stated principle, but it's not in terms of the various tools of state craft ever thought out in terms of how you get from here to
10:47 am
there. and so we have partly the mixed-up policy that tom was referring to over the last, you know, course of a couple decades is because we're mixed up in many our own minds about that. the south koreans are mixed up because of the costs of unification and, of course, as i tried to say in my opening comments, the chinese would rather not see it. you know they'll, they might go ahong with it should we, should we have a comprehensive strategy that changes the risk calculus that says it's better that this guy goes than we have the threat of not only the war, but a few other nuclear powers on their doorstep, and perhaps we could assuage some of their concerns. it'd be a risk for everyone, obviously. i mean, we would be taking a risk both in terms of the uncertainties and also the costs
10:48 am
and also we would cede something to china, and we are in the strategic competition with china. the chinese would be taking a rusk, obviously -- a risk, obviously. but you're absolutely right. there is only, you know, we're kind of all edging around it. there's one solution to this problem long term, and the solution is the end of the kim regime. and, you know, but the various confusions within the u.s. government about what it would take to do that or whether we should even say that or, you know, whether it's politically correct -- whatever it is, you know, is deeply hampers any cohesive strategy. >> if i could add to that, i think there's three issues that come up from your questions. first is, um, just the potential of a north korean collapse.
10:49 am
either just in itself. and when you look at the tremendous potential costs of a north korean collapse in terms of, you know, the potential for instability, tom mentioned the former regime elements that may continue -- >> [inaudible] >> the great potential humanitarian costs. we -- i wrote an article in the world affairs journal with robert kaplan on this subject referring to it as the mother of all humanitarian disasters in terms of what that would look like. you know, the potential for conflict, you know, for a conflict to break out with the north korean military even if pyongyang in itself has collapsed. all of these raise the specter of, that, you know, even that the potential for a north korea collapse in itself has very high
10:50 am
costs. second, the second issue is whether or not this is something that should, that we should wait for it to happen naturally or something that we should precipitate, which is a separate question. and, you know, i don't think you're going to find anybody who would disagree with the idea that everything would be better if pyongyang were to go away. and the question is whether we're willing to pay the tremendous costs and whether south korea's willing to pay the tremendous costs of precipitation or whether we think that we can come out to a better term over the long term by letting things change or hoping that things change naturally. i don't know, i don't have a decision on that. i can't really tell you what my opinion is. i think it's -- maybe i reflect the 20 years of u.s. government uncertainty about it. and finally, the third issue that you raised is how to talk
10:51 am
to the chinese about this. either precipitation or just the realization that north korea may collapse, it will pose a challenge for the two of us, and it's something we need to talk about. which i think is a very important discussion to have. both between washington and beijing, but also some of our military commands. i think the two most important people to talk about this would be the commander of the u.s. fk and the commander of the military region. if we could get those two leaders to start talking about this stuff, it'd be helpful. and it's not to say that we have not tried to raise this with beijing. at least on an academic level. what i've seen so far, though, is that the chinese are very uncomfortable talking about this. um, primarily -- at least as far as i can tell -- that if this discussion were to happen in a government-to-government level, the people that i've talked to in beijing are afraid that this would be leak, that it'd become
10:52 am
known publicly, that pyongyang would learn that china's talking to the united states about their collapse. which would have tremendous implications for china's relationship with north korea and probably something that that they're very concerned about. so while we think it's a good idea, i certainly think it's a vital thing, discussion to have, it's going to be very difficult to convince the chinese that it's something that is in their interests to do and won't blow back on them later on. >> abe, you make a very dangerous suggestion in the following, at least to me in the following way: i don't know exactly whether we talk to the chinese about this, but there is a body of american academics writing about this, imagining what the deal would be. and the, you know, sort of if the chinese understood their interests properly answer is that they would want a
10:53 am
neutralized and denuclearized peninsula. that is, a decoupling of the u.s./rok alliance and a removal of american extended deterrence. now, i don't know what the koreans would think about that, i don't know what the japanese would think about that. but the idea that that's a good deal for us needs some serious thinking. north korea has a really bad problem, but south korea's been a huge success story for the united states. and to fundamentally alter the terms of our relationship with south korea would be something i'd be very reluctant to do. so, again, it's not just a question of getting rid of the kim regime, it's a question of what kind of korean peninsula comes after. >> just to add to what my dear, beloved, esteemed colleagues have said, respected -- [laughter] no, i agree. >> [inaudible]
10:54 am
less respected. >> i agree. it is really, i think everyone agrees is that for the situation in the region to improve and the situation for the north korean people to improve either the regime has to change -- and that would be like having a leopard change its spots or really its dna -- or to have a new regime or unification with the south. the problem is to get to that shining city on the hill, you have to go through a swamp. and no one knows how bad this swamp could be. could it be a civil war? could it be hoss of nuclear weapons? could it be, you know, lashing out or implosion? we don't know. so everyone tends to feel more uncomfortable with the devil you don't know than the many devils you do know. also there's the question of how would you try to induce a regime collapse or change? is it assassination? is it active measures? is it killing them with kindness of just exchanges of philharmonics, etc., all to
10:55 am
bring about a chance of the regime? again, people are uncertain, and they're also fearful of the consequences. china, both the bush and the obama administrations have tried to discuss sort of chinese red lines, you know, triggers for their entry into north korea, all that both on a track one level, a track 1.5 and a track 2 level, and china as always refused to discuss it. they just do not want to touch that. and finally, you know, what i would do if i was secretary of state visiting china, i'd say, look, we know you don't want a crisis on your border. your policies have clearly made that clear. but, you know, you've turned a blind eye to north korean proliferation, you've been obstructionist in the u.n. security council against more comprehensive and effective sanctions. you refuse to make any action, or you prevented u.n. action against two acts of war by north korea in 2010. you are bringing about the very cry ice you don't -- crisis you
10:56 am
don't want either because you're emboldening north korea to do even more activities which'll create a crisis, or you are making us do things that you will not like such as increased missile defense as we saw secretary hagel announce, you know, and stronger alliances, etc., etc. that would have been my message in that unless you start putting some pressure on north korea, we're going to -- you're taking us down the path you dope want. instead -- you don't want. instead secretary kerry says we've got some missile defenses, do you want us to remove them, you know, before north korea had even thought of having them as a demand, and that, i think, was sort of a slap to china which doesn't like the u.s. responses to uncrease chinese bullying. and it sort of seemed like secretary kerry was channeling president obama when he told the russian president, medvedev, that he'd be more flexible about missiles in europe after the
10:57 am
election. so i think we sent the wrong message to china. >> go ahead. >> and it wasn't so much a question of saying let's look for the triggers to bring down the regime or anything like that, it's that, look, we keep hearing about how china's so upset with the north, and, boy, they're really angry at 'em now and so forth and so on, and they're rethinking all of this. but they're held up by the fact that the last thing they want to see is that regime collapse and, therefore, they're unable to put on enough pressure to get any change. i mean, this isn't, you know, i mean, i know you're supposed to say everything is nuanced and black and white in washington policy circles and so on, but this doesn't seem that nuanced. this really does seem like the north koreans say we are going to be on the track we're on unless, you know, we're stopped. now, obviously, if they thought someone was really willing to stop 'em to the point of letting the regime collapse, they might change their mind.
10:58 am
i mean, that's certainly possible. i'm not ruling that out. but i'm saying until the chinese give the sense that, you know, the worst thing in the world isn't the collapse of the north korean regime, the worst thing in the world is continuation of the way they're going because that'll bring about just what you said, then until that decision is made in beijing and that thought is communicated to the north korean leadership in a credible way which will not be easy, you're not going to see any change in north korea. so the real issue is how do you create that sense that, yeah, the world is kind of getting around to the point that we can now say that, yeah, the worst thing in the world wouldn't be the collapse. >> yeah. well, i think that with, you know, so if north korea's the soprano state, then -- i don't mean to fend anyone -- to offend
10:59 am
anyone, then china is sicily and is the one that's keeping the soprano state, you know, alive. or maybe that analogy's off. [laughter] anyway, the -- yeah. >> [inaudible] >> it's new york or whatever. but i, you know, i think, abe, that, you know, china has, china has got to be convinced, and i think we're all trying to say in different ways that the status quo is worse than a change in the regime. and right now it has no reason to think so. i was in government during a period of time where china did have reason to think so for all the reasons that i, that i laid out in following through these financial sanctions to their logical conclusion within china, the thought that the japanese
11:00 am
were actually serious about nuclear weapons, the thought that the u.s. was at point striking fear in the hearts of dictators everywhere for, you know, at least 12 minutes or so, maybe 13. and china reacted to that. so there's an audience in pyongyang, obviously, but we may not know chinese interests, but we can change the way they calculate their interests, and i think we're all trying to say that in different ways, that the status quo, as bruce just said in the his own way, the status quo is actually more dangerous for you, china, than talking about how you're going to work with us to change the regime. and right now that, right now that cost benefit analysis, it always ends up that no matter what they say that they're very, very angry and they're going to hold their breath for ten more seconds or whatever it is is not serious because the status quo is still more beneficial to them
11:01 am
than the other. >> i think part of this with the hypothetical, i think you could get beijing tomorrow to agree if they could push a magic button to change the regime wherein north korea became like them, an authoritarian state with, you know, a marketless economy. of so it wasn't just the giant sucking sound for the chinese. ..
11:02 am
>> we are out of time. please join me in thanking our panels. that was a great discussion. [applause] [inaudible conversations] >> both gems of congress return
11:03 am
to the hill today. the house will travel in at noon eastern for morning our speeches. and to be in for legislative work. on the agenda in the house this week is cybersecurity bill that encourages companies to share information about potential cyber threats with each other and the federal government. you can follow the house live on our containing network c-span. the senate gavels in at 2 p.m. eastern for speeches and debate on a judicial nomination. and tomorrow in the senate work begins on the gun-control bill with debate on amendments expected to take up most of the time this we. the senate is live here on c-span2. also we will have remarks from american express ceo on the global economy and job creation. he will be speaking at the economic club of d.c. and you can watch his remarks live at 12:30 p.m. eastern on c-span3. here i c-span2, the president of iceland will be speaking at the national press club on protecting natural resources in the arctic. we will hear about the
11:04 am
challenges including sea ice melt and managing fisheries and the ecosystem. that is live at 1 p.m. eastern time. >> orphaned at age 11, she lived with her favorite uncle, james buchanan. years later he becomes president and because he is unmarried, she served as white house hostess. she's the first to be called first lady on a regular basis. and is so popular she sets trends in clothing and children and ships are named after. we will look at her life and that of her predecessor, jane pierce go along with your questions and comments by phone, facebook and twitter. first ladies tonight at nine eastern on c-span and c-span3. also on c-span radio and >> last week treasury secretary jack lew testified on the president 2014 budget request for his department. he talked about possible tax increases and changes in social
11:05 am
security benefits. the hearing was held by the house ways and means committee and runs about two hours. >> and [inaudibl[inaudible conv] >> good morning. the committee will come to order. well, good morning, mr. secretary, and welcome to the ways and means committee. the last time you testified before this committee was as mr. director. and so please allow me to publicly do what i've already said you in private, and that is to congratulate you on your new post.
11:06 am
as you are well aware, this committee has broad jurisdiction and interacts with many departments and agencies, none more important than the treasury department. as such, it is my sincere hope that we will be seeing a lot of each other, and, equally important, that our staffs will be working a lot together. on monday, the front-page of the "new york times" business section read, lew to press for growth in europe. mr. secretary, i appreciate and share your concerns over the fate of the european economy, but i am first and foremost troubled by the growth, or lack thereof, of the american economy. the simple truth is far too many families are still struggling. they face higher food prices, higher gas prices and higher tuition prices for their children. meanwhile, many have had their hours reduced and their wages frozen. there is no cure-all, but there are real, achievable policies that can help strengthen this economy and turn things around for american families, chief among those are fixing our broken, outdated and complex tax code and balancing our budget. i'm sure you'll hear from mr. ryan, and others, on the need to balance the budget, which the administration's budget never
11:07 am
does so, i will focus today on the tax code. america's tax code is broken and i'm committed to working with anyone, republican or democrat, to fix it. that's why i was encouraged that the president put forward a plan to tackle a few of the challenges facing our tax code. but the simple truth is that the president's proposal isn't the real reform we need, and it doesn't go nearly far enough to address the needs of all job creators. the problem with our tax code isn't how much money it makes for washington. in fact, our government is on track to double the amount of money it takes from hardworking taxpayers over the next ten years, proving the government has all the revenue it needs. instead, the problem with the tax code is that it costs american families too much time and too much money to comply with. mr. secretary, you know the facts. americans spend over $160 billion each year trying to navigate through the complexities of the u.s. tax code. it takes the average american taxpayer 13 hours to comply with
11:08 am
the tax code, gathering receipts, reading the rules and filling out all the forms the irs requires. much of this is due to the fact that in the past 10 years, there have been more than 4,400 changes to the u.s. tax code, more than one a day. instead of reversing that trend and trying to make the tax code work for the american people, this budget adds new levels of complexities and creates new credits and deductions. mr. secretary, it is our job to make sense of this tax code and i hope you and the president will work with congress to deliver real reform to the american people. our tax code needs to be genuinely user friendly. you shouldn't have to pay a professional to figure out your taxes. yet, the code is so riddled with layer upon layer of complexity that nine out of 10 americans don't feel comfortable doing their own taxes. they are forced to either pay a professional or go buy commercial software. americans should have faith that their government is taxing them effectively and efficiently. instead, they fear the irs and the potential of being audited. our tax code needs to be fairer.
11:09 am
at a time when american families are just trying to make ends meet, we shouldn't be taking more of their money to bailout washington's inability to control spending. let's put an end to the special interest loopholes and the handouts and use that revenue to create a simpler, fairer tax code that lower rates for all americans. mr. secretary, americans across this country are sick of washington's gridlock. that is why i will work with you, the president, republicans and democrats, to simplify and fix this broken tax code. this budget is a first step, but america can do better than what the president is proposing here. it won't be easy, but this committee, republicans and democrats, are willing and ready to do the tough work our constituents sent us here to do. we don't have to settle for the same old game of giving washington more taxpayer money and calling it reform. it has been 27 years since this town cleaned up the tax code. it is time for us to do our job again. hardworking taxpayers deserve real solutions that make our tax code simpler and fairer for
11:10 am
every american. let's work together to accomplish that. i want to thank you again for being here. congratulations on your new job, and i'll now turn to ranking member levin for his opening statement. >> thank you, mr. chairman. welcome, secretary lew. we have to get used to that title since we've always known you with other titles, but mostly by your first name. i'm tempted to ask you when is the first time you appear before this committee? >> the first time i was in this room was probably in 1973, on ahrq, pension reform. [laughter] -- h.r. two, pension reform. >> we've enjoyed so much working with you in the past, only one of us i think goes back that far. and we all look forward to working with you in the days
11:11 am
ahead. you are appearing today to discuss the administration's 2014 budget. that's why you were here. which follows those presented earlier by house republicans, house democrats and senate democrats. clearly, the administration's budget reflects an effort to open up the search for some common ground. unfortunately, this has been rebuffed in response is of the house republican leadership. the administration made clear that any search for common ground requires a balanced approach. and my guess is the president has used the word balance perhaps more than any other word, for good reason. a combination of budget cuts and additional revenues. the republican approach is based on imbalance. the tax cuts to public is -- the
11:12 am
tax cuts that republicans propose in the budget would leave a $5.7 trillion revenue gap. yet they have never provide specifics on how they would feel it. we know is that he would almost certainly require eliminating or dramatically cutting tax provisions that have been vital to middle and lower income families, including the mortgage interest deduction and the exclusion for employer provided health care. they are budget reaffirms their plans also to turn medicare into a voucher program and repeal the benefit provisions, if not the revenues which they propose keeping. and its budget the administration has also come forth with some further ideas on business tax reform. and in doing so, it is highlighted that while lower rates are important, they must not come at the expense of
11:13 am
critical investments that american enterprises need to thrive and to succeed. i hope that foundation and the theme of tax equity, among others, will guide us as we face the challenge of tax reform, tax reform based on reality, not mainly on rhetoric. the imbalance in response from house republicans is further illustrated, even as we hear today the testimony of you, by the unwillingness to appoint conferees to consider the budget bills passed by the house and senate, in conjunction with the administration's budget. this continued republican embrace of a budget deadlock is all the more worrisome, if i might say, as the sequester continues to unfold and as the debt ceiling once again approaches. indeed, it was made all the more
11:14 am
worrisome by the house republican hearing yesterday that focus on the debt ceiling in terms of the possibility of prioritizing our obligations, obligations all emanating from congressional actions. we cannot continue on this dangerous path. hopefully this hearing will serve a constructive opportunity to embrace a different path. i yield back. >> thank you very much, mr. levitt. again, it's my pleasure to welcome secretary jack lew back to the committee on ways and means. we look forward to your testimony. the committee has received your written statement. it will be made a part of the formal record. secretary lew, you're recognized for five minutes. >> thank you, mr. chairman, and thank you, mr. chairman, ranking member levin, for your gracious welcome here today. it's an honor to appear and to visit the president's budget for next year. and i sit here as the chairman noted, surrounded by four decades of memories of many
11:15 am
important occasions. when bipartisan cooperation has moved the country forward in the best interest of the american people. at a city today looking forward to continue in that tradition this year and in micro. our economy is much stronger today than it was four years ago, but we must continue to pursue policies that help create jobs and accelerate growth. since 2009 the economy has expanded for 14 consecutive quarter. private employers have added nearly 6.5 million jobs over the past 37 months, the housing market is improved, consumer business an it's been has been solid and exports have expanded. but very tough challenges remain. while we removed much of the wreckage from the worst economic crisis since the great depression, the damage left in its wake is not fully repaired. families across the country still struggling. unemployment remains high. economic growth needs to be faster. while we've made substantial progress we must do more to put
11:16 am
our fiscal house in order. at the same time political gridlock in washington continues to generate its efforts. including harsh and discredit spending cuts from the sequester that will be a drag on our economy, in the months ahead if they are not replaced with sensible deficit reduction policy. this is my first opportunity to appear before yes treasury secretary and discounts from this vantage point how we need to confront the difficult challenge. this is far from the first budget i worked on. in my experience the good budget offers practical solutions to problems of its time. the presence of budget does that by making investments that will drive a growing economy and iran in our deficits responsibly so we can replace the across-the-board cuts immediately and restore fiscal stability over time. a good budget must also be grounded in reality. this budget deal squarely with the world as it is now and is a will be in the future. it reflects the need for compromise to find a path that command bipartisan support and recognizes issues a major consequences like the facts are demographics are shifting.
11:17 am
with the retirement of the baby boom the number of retirees is growing. like the fact the millions are living in poverty. like the fact that wages and incomes for middle class americans have not improved for more than a decade. that despite the significant strides to the affordable care act, health care spending remains a key driver of long-term deficit. this budget is animated by the simple notion we can and must do two things at once. strengthen the recovery in the near term while reducing the deficit and debt over the medium and long-term. this is been the presidency long-standing approach to fiscal policy. when you compare the trajectory of our economic recovery with those of other developed countries, in recent years, it's clear why the president remains so committee to this past. as the chairman noted i just returned from meetings in europe and it's clear that in countries where austerity measures were implemented to quickly, those economies have stumbled. ours is a different story, notwithstanding the to do more, our economy continues to expand with the support of growth oriented economic policies come
11:18 am
even as we make meaningful progress to reduce the deficit. it's important to bear in mind how meaningful that progress has been. in the last few years the president and congress have come together to hammer out historic agreements that substantially cut spending and raise revenue. we combined these raise revenue. when you combined the changed with saving some interest we are locked in more than $2.5 trillion deficit reduction over the next 10 years. today we're putting forward policies that will do with the budget deficit to below 2% of gdp and bring down the national debt relative to the size of the economy over 10 years. we restore the nation's long-term fiscal health by cutting spending and closing tax loopholes taking a fair and balanced approach. the budget achieves this balanced approach to a very specific steps such as reforming agriculture subsidies and limiting tax preferences for companies that move operations and jobs overseas. at the same time the budget incorporates all elements in the administrations of offer to speaker boehner last year. demonstrate the presidency readiness to stay at the table and make very difficult choices
11:19 am
and find common ground. consistent with that offer the budget includes things the president would not normally put forward such as means testing medicare through income related premiums, and adopting a more accurate but less generous measure of inflation known as chained cpi. it includes these proposals only so we can come together around a complete and comprehensive package to shrink the deficit by an additional 1.8 conan dollars over 10 years and to remove fiscal uncertainty that has dragged our economic growth and job creation. this framework does not represent the starting point for negotiations. it represents a fair balance between tough entitlement savings and additional revenues from those with the greatest income. the two cannot be separated and we are -- and were not separated when we're close to a bipartisan agreement. this budget provides achievable solutions or fiscal problems but as crucial as the czar we have to do more than just focus on deficit and debt. i know the significant a bounce in the budget and i will not take a backseat to anyone what comes to fiscal responsibility. under president clinton help
11:20 am
negotiate a ground breaking agreement with congress to balance the budget. as director of owning the oversaw three budget surpluses in a row and work with me on the left and right on a plan to pay off our debt. it will come as no surprise i was prevented disappointed to see the surplus is squandered. that does not mean we should make deficit reduction are one and only priority. not when our world demanded. we confront a fiscal challenges and the target investment to propel broad based growth. this budget lays out initiatives to fuel our economy now and well into the future. everyone of these initiatives is paid for in a deficit reduction package meaning they do not have a dime to the deficit. as the president explained, the surest path to long-term prosperity is to strengthen the middle class. this budget does that by zooming in on three things, bringing more jobs to our shores, making sure american workers have the skills needed to do those jobs, and making sure hard work amounts to a decent living. to generate more jobs in the united states we focus on growing our economy by making it
11:21 am
more competitive. the budget launches advanced manufacturing hves -- hubs around the country, investing in research and technology and cuts red tape. that also puts people to work right away repairing our deteriorating roads, railways, bridges and airports to our economy can compete in the future. we have made consider the headway over the last years to improve education and worker training and we can go even further by helping students acquire the skills that today's economy demands. and it means reconfiguring high schools assistance can get the high-tech highway skills businesses it needs. and it means making college more affordable. finally the budget would help lift communities hit the worst by the recession and it would adjust the minimum wage so that full-time workers are not stuck in poverty. the proposal i just outlined as a part of the presents a framework for growing our economy and cutting our deficit, and as this budget shows we do not have to choose between the two, and we must not.
11:22 am
we can adopt a powerful jobs and growth plan even as we risk of reforms to stabilize her finances. this is the way a budget make our economy stronger and help create jobs now and in the future. before close i just want to say that the debate we're engaged in is very important. it's part of a complex organ out of a process that will determine our nation's future. everyone on this committee knows the path before us will be a struggle. it will require difficult decisions that will directly affect the daily lives of millions of americans, entrepreneurs and immigrants, soldiers and veterans, the young and the elderly, the working poor and the very well off. it matters that we get this right. with that in mind attended today optimistic about what we can accomplish. i believe we can find common ground to stop the unnecessary standoff in manufactured crises, that we can come together to forge an agreement, to write our fiscal ship and we can make the compromises that are necessary to meet our obligations to future generations. thank you, mr. chairman, and i look forward to answering your questions spent thank you, mr.
11:23 am
secretary. i'm interested in making the tax code work for families instead of the special interest here in washington. and i'm interested in fixing this tax code so families struggling to get by and maybe save a little for the college education can do so, and this budget talks about reform the tax code for corporate america but it doesn't talk about reforming it for families and individuals. i think we can do better. for example, there are 15 different tax breaks for higher education, including nine or current expenses, to for classic status, for for future expenses. the irs publication on tax benefits for education is 90 pages long. this isn't a tax code designed for working families. it's a tax cut designed to make money for accounts and tax plans. don't you think we should make some sense of all of this and help working families? >> mr. chairman, i totally agree, and the presidents of budget has in the past calls for individual tax reform as well. the president has laid out principles to guide that. i think that the idea of tax
11:24 am
supplication come broadening the base is very important. the president has put in the context of a fiscal plan where i think we have a number of objectives that have to be achieved at the same time. we've got to get our fiscal house in order as part of that them we need to raise more revenue. and we think the tax reform ought to produce evidence to both raise revenue, semper fi the tax code, make it so that ordinary people don't need to have complicated hours long processes are go to accountants for simple tax forms. i participated in 1986 and tax reform. i know how hard it is to be another forward to working with you on a bipartisan basis to get that done. >> and i was pleased to see the administration taking more concrete steps toward tax reform in this budget. again i look forward to working with you and the president to make the code simpler and fairer for families and individuals. to help strengthen the economy. when i talk to middle-class americans in michigan back home
11:25 am
in my district, they are frustrated by the current status of the tax could. they don't understand the complexity, and they may not know that there had been 4400 change is the last decade but certainly they know that there have been a lot of them. it just seems unfair to me that the tax code forces americans to spend over $160 billion to comply, and 6 billion hours, almost 13 hours per person at the average taxpayer. every year, complying with the code is more expensive, more costly, and particularly when you look at this very tight margin, small business are on. this is a huge cost to them. and, frankly, it should be their time and money, not the irs is. i commend the administration for proposing revenue neutral tax reform in the bill, but again, don't you think individuals and families deserve a tax reform that makes the code simpler and fairer for them, to?
11:26 am
>> thank you i believe that we need to do both individual and business tax reform, and in the context of overall tax reform, to be clear, we do not think it can be revenue neutral. we think that there needs to be additional revenue to get our fiscal house in order him and the budget calls for $580 billion of additional revenue. on the business side, our goal has been very clear. could not agree with you more that we need to really go at all of the special provisions, the -- we need to enable ourselves to lower the rates so that our statutory rate could be more competitive with arrested were. our goal in business taxes form is really testing the economic growth and job creation. i don't believe it can be separated from over all tax reform. i think if you look at the decisions that small businesses make him even now to organize, whether to be a partnership or a corporation, it makes a big
11:27 am
difference what the relative treatment in the individual and business tax systems are. so just intellectually one has to look at it as a whole. i think that this is a big challenge. this is something that will require democrats and republicans standing shoulder to shoulder. every to shoulder. everyone other provisions that would eliminate to broaden the base has people and businesses that support it. that's a process that could only be done through bipartisan cooperation. >> mr. levin? >> thank you. when you look at business tax reform, the president of budget suggest we need to maintain certain provisions that relate to manufacturing and occupant osha. i want to focus, mr. secretary, on the gridlock in washington today. you are the treasury secretary. and what the consequences are.
11:28 am
so just briefly, i want to start with the sequestered. are you concerned? >> congressman, i think that the sequestered is very bad policy. it was designed to be bad policy, to motivate both sides to come up with a more sensible plan to achieve deficit reduction. and i think one thing we can be sure of when you go out of your way to design bad policy, you can produce bad policy. the effect of the sequestered is not anything that anyone should choose. they are census across-the-board cuts but if you look over all the impact them at a time when we should be worrying about growing the economy, it takes roughly half a percentage of gdp growth out of the economy. it is not good policy and terms of the impact of the individual can't pick it is not good policy in terms of the overall impact on the economy. i do believe we need to have a long-term, sensible path of deficit reduction.
11:29 am
the president's budget reflexive because the balance, shared sacrifice, and the sooner we do at the budget i think if you look at the series of deadlocks that we've had over the last few years, each one has led to loss of confidence in the economy. each one has caused individuals and businesses making decisions on whether to invest and grow their businesses and higher, worried about what is government going to cause there to be had when that maybe not the right time to make an investment decision. i think government should be helping, not hurting in the economic recovery and replacing the sequestered with a sensible balance a plan will do that. >> and it should be done now? >> the sooner the better. i think we don't have an economic emergency entrance of the deficit right now. our budget makes clean up the need to be on a path over the next 10 years, not, the cuts this year are not what matters so much as the reliable path over 10 years. the sooner we get the
11:30 am
sequestered out of the way, the sooner the economy would be relieved of the burden of that half percent of cut a gdp. .. >> all the debt limit does is it permits the government to pay the bills that congress has authorized to be incurred, and from the beginning of our history, the united states has always paid its bills. so there's no way to pick and choose about paying your bills without being in default on one or another obligation. so the only answer is to extend the debt limit which is what we expect congress will do. >> and lastly, you referred to
11:31 am
growth, and there was some reference to your trip to europe and your concern expressed there about their continued, i think at times, rigid embrace of austerity. so say why there's a major jobs component within the president's budget. >> no, i think if you look at the experience we've had in the united states and compare it to europe, we've had a stronger recovery because we got our financial system under control, we put measures in place quickly to deal with the depth of the recession, and we've done our fiscal consolidation, our deficit reduction over time. i think that that's a proven path. it's something that we're experiencing growth that's too low and growth in jobs that's too slow, but it's much better than the general experience in europe and in much of the world. i think that we need to grow the
11:32 am
economy, create jobs and get our fiscal house in order, and that's a message i brought with me in the meetings i had earlier this week. i think that there is a softening in some sense in europe. they started out a couple of years ago not worried about the impact of very high unemployment as much as we thought they should be. i think there is a growing concern in europe that it is a serious structural problem. we start out with that understanding in the united states. we think that 7.5% is a high unemployment rate. double-digit unemployment rates are unthinkable, and you have to have policies to deal with it. >> thank you. >> mr. onson's recognized. -- mr. johnson's recognized. >> thank you, mr. chairman. mr. secretary, i realize you're time constrained, so some of these questions i'd just like you to answer yes or no, if you don't mind. with respect to securing social security's future, if his book "the predictable surprise," a
11:33 am
retirement expert said if we fail to act, we threaten the prosperity of younger generations, a prospect your former boss, president clinton, said would be horribly wrong and unfair. and i appreciated that comment. that was 15 years ago, though, and that said, i'm encouraged that the president's budget took a first step toward protecting social security for today's workers by including the chained consumer price index to calculate the annual cost of living adjustment. is this more -- do you think this is a more accurate way of measuring inflation? >> i think as i indicated in my opening comments, congressman, there are -- it is something we're prepared to do as part of a balanced deficit reduction package. technically, it can't be justified, but it does have an impact in reducing rates of -- >> long term, yeah. i hear a lot of talk from aarp and others that using the chain cpi benefits, benefits.
11:34 am
is that true? and i think it does. >> i'm sorry, i didn't understand that question. >> they think that chained cpi cuts benefits. is that true? >> it reduces the rate of growth in the cost of living increases by about three-tenths of a point. >> yeah. basic benefits are not cut. >> funds lying benefits are not cut. >> right. benefits still grow each year that there is inflation. >> yeah. there's no doubt that we have not supported any measure that would cut the basic benefit, but i don't want to be misunderstood. a reduction in the rate of growth has an impact, and it's something that is very significant, and i appreciate your recognizing that in your opening comments, because -- >> we do. [inaudible conversations] >> long-term social security deficit by just 10%. it's not immense. does the president plan to close the remaining 90% gap, or is he just going to pass the bill to our grandkids? and is he serious about fixing social security? >> the president's made clear
11:35 am
over the last several years that he would very much want to work with congress on a bipartisan basis on a long-term plan to make social security is sound for the long term. he's laid out clear principles that guide that, and we would look forward to working with the congress on that. i think it's important for all of us to remember that in dealing with social security, the fundamental goal has to be protecting social security and getting it out of the context of the budget to have a long-term discussion is probably a good idea. >> i happen to agree with you. next week the subcommittee on will hold a first hearing in the hearing series announced by chairman camp on the president's and other bipartisan entitlement reform proposals, and that hearing will focus on the chained consumer price index, eliminating double dipping with respect to unemployment and disability benefits. and i'm deeply troubled the president's budget includes no proposal to prevent the 21%
11:36 am
across the board cut, disability insurance beneficiaries face in 2016 just three years from now. the social security subcommittee has held seven hearings over the last year on the disability insurance program, and i hope you will work with us to secure the future of that vital safety net. and under current law a person can receive both disability and unemployment at the same time. and that isn't right, and i don't know how someone can be able and available to work and also be unable to work due to disability. so today i'm going to introduce a bill to stop people from receiving disability benefits at the same time they're receiving unemployment benefits. and in his budget the president proposes to stop this, too, and i look forward to working with the administration to get this bill signed into law. thank you for your time, i yield back, mr. chairman. >> all right, thank you. mr. rangel's recognized. >> thank you, mr. chairman, and thank you. congratulations, mr. secretary.
11:37 am
in new york we live in two different worlds. we, especially in the borough of manhattan, we have the world of wealth and riches, and then we have the inner cities of poverty and despair. and i just can't believe at a time of a national crises that those that are doing so well are protected, and those that are not doing well at all, it seems to be we're going right back. with all due respect to the president's calculating the chain cpi, at the end of the day the benefits that would be received under the existing system would be reduced. and yet we are living, i think, at a time where the stock market is it now presently as an all-time high? >> it has been, yes. >> and would that not apply to the incomes of of the chief executive officers? is it true that they're getting
11:38 am
paid millions of dollars for the work that they're doing? i mean, you would know this better than most people. >> mr. chairman, i don't follow day-to-day -- >> can i know, but generally speaking for a corporate leader and the holder of our economy to receive two or three million dollars, it doesn't raise any eyebrows. having said that, everyone knows it. everyone knows it. and it just seems to me that when we take a look at the republicans' budget that would indicate that at a time through all of in this crisis we still find unemployment going down, we still find minor increases in employment, that that we would say now's the time to stop spending. now's the time to cut federal programs. now, it doesn't make -- cutting doesn't mean you're saving money, but at a time that we're trying to come back with the economy, that world that you spent a little time in in the
11:39 am
private sector, where are their voices? if these people are not working, have no disposable income and cannot buy, then small business cannot sell, and where are they? they're not complaining about a tax increase, but they're certainly not involving themselves in trying to resolve this issue that we find ourselves in. so i don't know what happens when you get out there, but do you hear from the private sector in terms of how we can break this gridlock? >> congressman, you know, i have to say that in the debate we had at the end of the year last year, i had numerous ceos tell me directly that they thought we should have the rate increase that went into effect. they were not at all -- it wasn't just that they weren't opposing it, they were more comfortable having the issue resolved that we would go back to the rates because they were embarrassed by the argument about whether or not they could afford the tax rate that was
11:40 am
enacted in january. i think that, um, you know, going forward it is going to be very important for the business community to stand up for the kind of balanced approach we're talking about because they care about the end result which is having the deficit and the debt be sustainable, and they cower about economic growth. we certainly are making the case for the budget in every sector that we can including in the business world. and i think the underlying problem that you've identified is one that's kind of central to what drives our budget. the disparity of income in this country is a real problem. it's a real problem. >> and we talk about increasing the minimum wages. the private sector's voice is heard so loud, it's deafening about what would happen if the lowest people on the economic ladder get an increase in minimum wage. i don't know what benefits my republican friends get out of such a small number of americans receiving so much profit, so much income, and they're willing
11:41 am
to whisper to you that they're prepared to make some sacrifice for the good of the nation, and yet they don't how to communicate this. i mean, it is totally unbelievable with all of the money that they spend on k street. the people in the middle of my district, they don't have people who come down here to protect their interests, not even a fair, equitable way to determine how we're going to cut money from them for social security. but having said that, do you respond when the people tell you that, you know, the president's right, we should be paying more, we should be involved in this deficit ending? >> well, i actually think that we heard quite a lot from the business community at the end of the year supporting the kind of balanced approach we're proposing. i think they're a little confused by the budget debate in washington these days. i mean, when i talk to business leaders now, they don't know if there's still the chance of a bipartisan agreement, if it's completely on the sidelines. one of the things the president's budget is saying is
11:42 am
there is space in the sensible center for a budget agreement. >> all right, thank you. >> give us the names of those cooperative corporate leaders. i'll bring them up here -- >> time's expired. >> thank you, mr. chairman. >> thank you. mr. brady's recognized. >> well, it's not exactly a profile in courage that big business leaders were willing to raise taxes on small businesses in america. and not exactly a courageous move by any measure. you know, this budget is not fair to taxpayers. the president's budget never has to balance, so washington never has to live within its means. it's not fair to seniors that the president refuses to save social security and medicare for its own sake, for the seniors rather than attach all these unrelated provisions that have nothing to do with those important programs, and it's certainly not fair to the unemployed, those who can't find a breadwinner in their family because this recovery has been the weakest in modern times.
11:43 am
we're missing four million jobs because the growth gap is getting bigger. food stamps, since the recession bottomed out, americans are more likely to be forced to the food stamp line than to actually walk into a company that's offered them a new job. and those who have given up hope and just dropped out of the work force, we've gone backward to jimmy carter days. and so i don't think this budget's fair to them because it stays the course on just very weak, poor economic leadership. looking toward those areas where there may be common ground, tax reform and saving social security and medicare, we -- i think there's a path forward. i don't think we ought to close loopholes so the government can spend more. we ought to close loopholes so we can lower taxes for everyone; families, small businesses, big business as well. and so my -- i have three
11:44 am
questions for you, mr. secretary. and like chairman camp, welcome you back to the committee. appreciate the work you've done in the past. i think you can bring a valuable work ethic to this whole effort. my first question is will you commit to sitting down with republicans today, starting now, to fix the broken tax code this year? >> congressman, we are already working to provide technical support for both the house and the senate as they, as you do your work. >> so is that closer -- so you, mr. secretary, as the point man for the president on tax reform, are you willing to sit at the table and stay at the table to finish fundamental tax reform this year? >> congressman, um, in the context of our overall fiscal plan, we have a disagreement on whether or not we need to raise revenue. that's a legitimate disagreement. we're going to have to work our way through that. i, in the context of a fiscal
11:45 am
plan that solves our deficit problems, we very much want to engage on tax reform. >> is that closer to a yes that you'll come to the table and stay there? >> i've always -- >> or closer to a no? >> i've always been prepared to talk, and i remain prepared to talk. but i'd also like to be very clear, i can't paper over what is a significant difference. >> well, the question isn't that there's differences. we have different ideas. the question is will you commit to coming to the table now to resolve those differences? >> we have always been prepared to talk with this committee and other committees about the important business before us. nothing is more important than getting our fiscal house in order, and as part of that, tax reform is a very, very important part. >> could you possibly be more vague at this point? [laughter] second question. will you commit to fixing the broken tax code for families and small businesses as well as for big business? >> again, as i responded
11:46 am
earlier, we are very much supportive of both individual and business tax reform. we think they need to move together, and we'd like to work with you to do that this year. >> and so your point is we should not do -- the white house's point is we should not do corporate tax reform alone, that we need fundamental reform, authentic reform for families and small businesses as well? >> well, congressman, you're asking questions about small business. small businesses have to make the decision where they organize under the corporate tax laws or as partnerships under the individual tax laws. i don't know how we create a situation where they can make a sensible decision if we don't deal with it -- >> okay. but the government's role is not to tell businesses how they organize. >> no, no, not at all. >> and so so many of them file as individuals. so my question is really simple: will you commit to authentic tax reform? fix broken codes for families as well as small businesses? >> so congressman, i'm trying to answer with some precision. small businesses do make their
11:47 am
own decisions how to organize. one of the reasons they organize as partnerships is that our statutory rate so high on the business side. >> so -- >> so as we go through business tax reform, that will change the decisions that many of them make. >> ten seconds. will you commit to saving social security or medicare for its own sake? is. >> i have for 40 years believed in -- >> time has expired. mr. mcdermott's recognized. >> thank you, mr. chairman. we've been buried in a tsunami of propaganda that the problem here is there's too much spending, and there is not enough tax relief for the people at the top. hedrick smith of the new york times has written a book called "who stole the american dream?" you sat here through almost all of this, because it started in 1971, and he chronicles the process by which we've done that. and in the process over the 30 years, the middle class has been
11:48 am
hollowed out. their incomes have been stagnant, their job prospects are diminished, and the retirements are less secure. it's been a long time coming what we've got today, but the big start was under reagan with the disastrous reagan cuts of '81 that were favored the wealthy, it never trickled down on the rest of the country. reagan introduced a trend of emptying out the middle class pockets, and it's really gone on. in the '80s and '90s, 401(k)s were popularized, and pensions were ended for many, many people in this country. so the retirement security of americans is deeply, deeply underfunded. banking deregulations started in the 1990s. along with the reagan creation of the subprime, subprime high interest rate housing loans that started us into the disaster of 2007.
11:49 am
the disastrous 2001 and 2003 bush tax cuts have given the chunk of the deficit, a big chunk of the deficits. now, in this country if you play by the rules and you work hard, you're running in place. you're not getting ahead, and you know your kids aren't going to do as well as you did. that's what the american people think today. there's some stuff in this budget which i like. there's investment in the future. that is in worker retraining, the infrastructure bank, money to end the sequester. i worry about our health care history in the long run if we don't continue to invest at the national institutes of health. people get ph.d.s, we don't make the advances. we simply allow singapore and other countries to take it away from us. and so the whole question of investment gets lost if all this talk about corporate -- in all this talk about corporate tax reform. we lower the rates on corporate taxes, we come down to 15% on
11:50 am
capital gains, where are we? the middle class is being destroyed in this country. now, what i want you to do is imagine that we're a bunch of workers from ohio out of work for a year. what would you say about this budget that would be aimed at letting them understand that the president is charting a new course to the save the middle class which they feel is being crushed? they can't educate their kids, they're losing their houses, they haven't been working for a year, and they're looking for some hope. >> congressman, i would say there's much in this budget that i would point to that working family from our commitment to early education through early childhood through higher education to make sure that every child has a chance to have the skills to compete in the economy that they're going to grow up into. >> a long-term thing. >> it starts right away.
11:51 am
>> give me something i can see tomorrow. >> early childhood education starts right away. so we can't wait until people are 22 to ask if they have the skills they need. our infrastructure proposals are to jump-start infrastructure spending. i can make the case for infrastructure on so many levels. you know, when i talk to ceos, one of the first things they usually say to me is we're worried about our infrastructure. our airports, our water ports, our roads, our bridges. we're not going to compete in the 21st century. well, those are jobs today. to rebuild our infrastructure is not way off in the future, it's something we need to start immediately. >> our republican colleagues resisted all the president's efforts or almost all the president's efforts in infrastructure creation a couple of years ago. explain to me how you're going to finance it and how it can work. how will it work? >> well, obviously, it has to be in the context of a fiscal, an overall fiscal plan. we have to show a path in the
11:52 am
medium and long term for bringing our debt and deficit under control. but our budget has made clear that when you make the tough decisions, you can afford to do that. i mean, in addition to everything else we're doing in this budget, we are also ending a second war. and as we do that, we're freeing up resources, and we would say that as we end the war in afghanistan, we need to invest here at home. as we end the war in iraq, we need to invest here at home. and we have a budget that brings the deficit down to below 2% of gdp in the tenth year and invests in building our economy and creating jobs today. >> all right, thank you. mr. tea berry's recognized for five minutes. >> growing up on a worming family -- working family from ohio, my colleague from washington state is really trying to engage me in a dialogue here, and i'm not going to take the bait. but i will remind him that back in 2010 mr. lahood testified at the time opposed to a gas tax with respect to infrastructure. but i'm not going to go there. i don't want to take my time today away from, mr. secretary,
11:53 am
thank you. and i'm going to be in a learning mood here. first question i have for you is, and you may not know the answer to this, but if you could have your staff get back to me, i'm going to try to be constructive. it's come to my attention from some folks in ohio that the irs is seeking to oppose a ticket tax on transportations of people in the air for management services. and they're reinterpreting, last year, reinterpreting a law that was passed during the fix son administration -- the nixon administration. and my understanding is if you look at this, they're legislating rather than administrating and clearly, in my opinion, overstepping their authority as a regulatory agency. the irs argued that the new interpretation is correct and it has been due all along. does all along mean since 1970? i don't know. but i'm concerned about it, and
11:54 am
i'd like to have your staff maybe communicate with us on what you believe the irs is doing and if it's correct. >> congressman, i'd be happy to look into it. >> thank you. and i don't want to put you on the spot, but if you could -- it's an important jobs issue in just not ohio, but all over. i along with my colleague, mr. kind, who i don't think is here co-chairing a group on retirement savings. and in the president's budget for the very first time there appears a provision that i'd like to learn more about. and if you could maybe comment on it. and it deals with retirement savings. and it deals with, it appears, capping the amount of dollars that an individual can have in a retirement account for, in terms of tax benefit in a retirement account. and it appears it caps the revenue stream in retirement at
11:55 am
$205,000 cumulatively at $3 million. my question is, how -- and i'm trying to learn. i'm not being critical. thinking back to my own tsp which didn't have $3 million in it, but thinking about what happened in 2007, between 2007 and the end of 2008, and i'm sure it represented, my account represented what happened to most every american. the value of that account based upon the stock market collapse in 2008 significantly went down. so if you, if you're 58 year ors old and you're not retiring for ten years and your market, your stock market's high and you have $2.9 million, do you stop saving to avoid this for retirement? do you, do you worry about, well, is the market going to go
11:56 am
way up at this point, or could it go way down? and it could go from 2.9 million to 1.9 million in a matter of months based upon the experience we saw. how do we, and i include me in this, how do we manage, administrate a program like this to make sure that it's done without any penalties being created or encouraging people to take an early withdrawal to avoid some sort of penalty to go over the three million? just thinking where this is coming from in terms of min straiting it. i think i know the politics of what you're trying to get to, but i'm concerned about those impacts. >> congressman, retirement savings is a hugely important issue. >> yeah. >> and for the average working family, unfortunately, retirement savings are more like 50-$70,000 than $3 million. so for the average working family, they are so far from that $3 million level that they
11:57 am
probably listening to this conversation would wonder what we're talking about. >> oh, let me -- mr. secretary, i get it. my dad has a sixth grade education, came to america, and from when i was a kid talked about saving for retirement. but what to our task force says up here is to try to encourage everybody to be self-sufficient. and what i don't want to do as a policymaker is send the message, oh, we're going to go after somebody who's trying to be self-sufficient and create another trap for them or penalty for them. i'm just trying to figure out how do we administer that? >> so we have for a long time looked at ways we could encourage people to participate in savings, and we have a proposal that we would hope be part of the conversation that would have automatic enrollment so that people opt out instead of opt in. a simple behavioral change that we think would very much improve the likelihood of people saving early and through their careers. the provision here, it really reflects a judgment that there should be tax incentives up to a
11:58 am
certain point. but beyond that we certainly encourage people to save beyond that. the tax incentives have to be looked at in the context of the trade-offs. and to save for your retirement with tax benefits a limit of $3 million seemed like a reasonable place to draw the line so that we are encouraging the vast majority of americans to save as much as they possibly can. >> all right. time has expired. >> thank you. >> mr. lewis is recognized. >> thank you, mr. chairman. welcome, mr. secretary. i just want to take an opportunity to thank you for your many years of service not just to the congress, but to our country. >> thank you. >> mr. secretary, the unemployment rate in the city of atlanta is at 8%. so as you can guess, many people in my district -- like people
11:59 am
all around our country -- are very much focused on jobs. president obama has made it very clear that we need to invest in jobs and job creation. could you tell us how this better reflects the administration's continued efforts to create jobs and help people get back to work? >> congressman lewis, thank you for the kind comments. this budget is all about growing the economy and creating jobs. in its kind of macro sense, it's about taking the steps we need to this year and over the next ten years to make sure that there is best environment for job creation that we can produce. that is getting our fiscal house "news of the world," yet providing -- in order, yet providing the support to make sure we have educated workers, we have an infrastructure that's sound and that serves the needs of the future as well as the past. and we need to get started with that right away. we have incentives for
disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 4/15/2013